RESTRICTEDCode - Organization of American States



trade policies by sector

1 INTRODUCTION

The Guyanese economy is still heavily dependent on the primary sector. Agriculture and mining continue to be of principal importance. Primary activities represented some 45% of GDP in 2002, and generate most of Guyana's foreign exchange earnings. Between 1997 and 2002, the contribution of services and agriculture to GDP increased, while the share of manufacturing and mining decreased.

Traditional agriculture, comprising mainly sugar and rice, has been sustained largely by preferential access to the CARICOM, EU, and U.S. markets. Production in this sector faces competitiveness problems; the Government has been trying to remedy this by seeking to improve productivity while also promoting non-traditional crops. Export taxes are applied to agricultural products such as unrefined cane sugar, molasses, and wildlife. Imports of agricultural products generally face higher tariffs than industrial goods. Tariffs are particularly high for beverages, spirits, and tobacco, which also face high consumption tax rates. The sector is subject to a range of non-tariff measures. Although Guyana applies no quantitative restrictions on the importation of agricultural products, and uses no tariff quotas, some animal and vegetable products are subject to import licensing and SPS requirements. Guyana does not provide export subsidies, nor does it extend non-exempt support to agricultural producers. Support to the sector is provided through programmes that have been notified to the WTO as Green Box measures. An agricultural sector programme is currently in place, is aimed at introducing policy reforms to improve the sector's efficiency.

Although mining has faced difficulties in recent years, it continues to be an important activity for Guyana. The main products are gold, bauxite, and diamonds. The production of bauxite in particular has suffered from high costs, and attempts to redress the industry, including through privatization, have proven unfruitful. The mining sector is also affected by high domestic taxation.

Services account for some 40% of GDP. Guyana has made GATS commitments in five sectors: business, communication, financial, tourism, and transport services. Tourism is the most important service activity in terms of foreign exchange earnings, although it is less important to Guyana than it is to most other CARICOM countries. The industry enjoys various incentives. Financial services, like most other service activities, are generally open to foreign investors, as witnessed by the relatively large number of foreign banks operating in the country. In telecommunications, there is a monopoly in the provision of fixed telephony services until 2010, but the provision on non-landline services, such as cellular telephony, is open to domestic and foreign competition.

2 Agriculture

1 Features

Agriculture is of major importance for the economy of Guyana. Value added in the agriculturë sector in constant prices (excluding food products and fisheries), was equivalent to 30% of GDP in 2002, with sugar alone contributing to 16% of GDP. Its contribution has increased slightly since 1997, when the share was 29% of GDP, but has declined slightly since 1992 (Table IV.1). Including agri-industry products (food processing, beverages, and tobacco), agriculture represented about a third of GDP in 2002.[1] Some agricultural subsectors are labour-intensive, although mechanization is widespread in sugar and rice. Agriculture employed 23.1% of the total labour force in 1997-98, and some 70% of the population live in rural areas. Traditional agriculture is mainly sugar and rice. Non-traditional products include a variety of tubers, corn, peanut and coconut oils, plantains, some vegetables, herbs and spices, fruits (pineapple, pear, carambola, watermelon, mango, cherry, grapefruit, orange, and tropical fruits), as well as coffee, cocoa, and cotton. Livestock includes dairy and beef cattle, swine, poultry, sheep, goats, and rabbits. Bee-keeping and hunting are also practiced in Guyana.

Table IV.1

Agriculture as percentage of total GDP, and growth rates, 1992-01

|Sector |1992 |1993 |1994 |1995 |1996 |1997 |1998 |1999 |2000 |2001 |

|Share of total GDP | | | | | | | | | | |

|Sugar |20 |10 |18 |17 |17 |16 |15 |18 |16 |16 |

|Rice |3 |3 |3 |4 |4 |4 |4 |4 |3 |4 |

|Livestock |1 |1 |2 |2 |2 |2 |2 |2 |2 |2 |

|Other agriculture |5 |5 |5 |5 |5 |5 |5 |5 |5 |5 |

|Fisheries |3 |3 |3 |3 |3 |3 |3 |3 |3 |3 |

|Total agri sector |32 |31 |30 |30 |31 |29 |29 |32 |29 |30 |

|Total GDP |100 |100 |100 |100 |100 |100 |100 |100 |100 |100 |

|Growth rates | | | | | | | | | | |

|Sugar |52.1 |-0.3 |4.1 |-0.6 |10.3 |-1.2 |-7.5 |25.8 |-15.0 |4.0 |

|Rice |11.7 |22.9 |10.9 |35.7 |6.2 |1.9 |-0.5 |7.7 |-20.0 |10.6 |

|Livestock |-1.8 |11.1 |15.0 |21.7 |25.0 |5.7 |-1.8 |1.8 |4.5 |2.6 |

|Other agriculture |-1.0 |5.2 |5.9 |8.4 |3.9 |5.4 |6.7 |1.1 |1.1 |1.1 |

|Fisheries |-3.5 |2.8 |7.1 |10.0 |2.3 |8.1 |-2.7 |0.7 |14.6 |0.6 |

|Total agri sector |27.6 |0 |5.9 |6.8 |8.8 |1.5 |-3.4 |14.8 |-9.4 |3.8 |

|Total GDP |7.8 |8.2 |9.0 |4.6 |7.9 |6.3 |-1.3 |2.6 |-0.8 |1.9 |

Source: Guyana Bureau of Statistics.

Growth in the agriculture sector has been highly volatile, alternating between periods of stagnation, pronounced declines, and rapid growth. Over the 1993-01 period, agricultural activities expanded at an average annual rate of 3%, compared with average GDP growth of 4.2%. Agricultural exports are dominated by traditional products, especially sugar and rice, which accounted for over 30% of Guyana's total merchandise exports in 2001. Exports of shrimp have gathered importance in recent years. Traditional agriculture faces major competitive challenges in the global market, but has been sustained largely by preferential access to the CARICOM and EU markets. Recently, the Government has been seeking to improve productivity in the traditional sectors while also promoting non-traditional crops. Greater attention and emphasis are being given to the cultivation of crops such as oil palm, coconuts, green vegetables, ground provisions, fruits, and flowers. The authorities report that while a significant amount of these products would be utilized locally, the greater proportion would be destined for the tourist resorts of the Caribbean, and the niche markets of North America and Europe.

Various projects emanating from the Food and Agriculture Organization (FAO) have been designed to encourage increased diversification away from traditional crops. The different projects come under the FAO umbrella project, the Regional Transformation Programme (RTP). The RTP is designed to achieve international competitiveness and food security for the region and to redress the balance between food imports and exports.

Guyana has about 25,000 farm households; some 90% are concentrated along the narrow coastal plain. The total arable land in this area is 400,000 hectares, most of which lies below sea level and is protected by sea defences.

2 Policy considerations

Several institutions deal with or support the agriculture sector, including the Ministry of Agriculture (MOA); the Ministry of Fisheries, Crops, and Livestock (MFCL); the Ministry of Regional Development; the Regional Democratic Councils; and the National Agricultural Research Institute. The MOA and the MFCL are responsible for policy formulation and for monitoring implementation.

The Crops and Livestock Department of the MFCL is primarily responsible for providing technical and extension services to the farming communities. The Veterinary Diagnostic Laboratory, which is supposed to provide parasitology, haematology, pathology, microbiology, and other diagnostic support to the livestock rearing community, is currently not operational due to a lack of trained personnel and equipment. Other institutions collaborating with the provisions of services of this type include the Agricultural In-Service Training Communication Centre (AITCC), which provides agricultural information and trains farmers and extension personnel, and the Livestock Station at Mon Repos, which was originally designed as a centre for livestock research in the MOA, before these activities were transferred to the National Agricultural Research Institute (NARI).

The NARI's mains functions are: to advise on and develop systems to promote balanced agricultural development and optimize agricultural production through research; and to facilitate the use of more advanced production technology by agricultural producers in order to achieve and maintain national self-sufficiency and export capacities in food and fibre. An Agricultural Research Committee advises the Minister of Agriculture on agricultural research policy issues. This committee also supervises and controls the functioning and activities of the NARI, and is in charge of approving, overseeing, and evaluating the programmes it is implementing.

The Guyana Marketing Corporation (GMC) was created in 1963 as a marketing board for agricultural products. The GMC bought all farm products offered to it by farmers at a predetermined price, and then sold the produce to consumers at various outlets and from trucks. Consumer and producer prices were both subsidized: the GMC ran at a loss as it made up the difference. In 1985 the GMC was drastically reformed and stopped all buying and selling operations. Instead, the "new" GMC (NGMC) was mandated to provide market facilitation services to the private sector for the export of non-traditional agricultural produce, facilitate local market development, develop and disseminate post-harvest technology, conduct market research, and provide market intelligence and technical support services to farmers, processors, potential exporters, exporters, and investors. In 1997, NGMC resumed the buying of farmers' "quality" produce (i.e. top-end vegetables and fruit), at prices negotiated directly with them, for sale both to domestic and overseas buyers. The authorities report that these activities are now winding down. The NGMC also acts as a one-stop brokerage desk for the exportation of fruit and vegetables.

The needs of farmers are coordinated through plans and decisions under the Neighbourhood Democratic Councils (NDCs) of the Regional Democratic Councils (RDCs); according to the authorities, both sets of councils face constraints. There are also several quasi-governmental entities as well as non-governmental and other organizations (co-operatives, producer associations, etc.) that operate at the community level.

The structure of the agricultural policymaking machinery has come under some criticism in recent years. The National Development Strategy (NDS), for example, argued that the large number of institutions dealing with agricultural issues hinders their performance.[2] The NDS characterized the MOA and the MFCL capacity for policy review as weak, and stated that severe financial constraints have led to an inadequate availability of equipment and supplies, further limiting the effectiveness of the Ministries' staff. The NDS considered that there is a dualistic institutional structure for agricultural products: well-organized marketing and other support arrangements for rice and sugar; and fragmented, underfunded, and ineffective arrangements for non-traditional crops and livestock. The NDS also noted that the supply of credit to farmers has been traditionally limited by the risks linked to agricultural production and markets and the sector's small size and informal nature; in consequence, the penetration of rural areas by commercial banks is low, leading to inadequate credit mobilization and delivery. The NDS proposed the development of institutions that would help to improve agricultural operations, such as the creation of a new Guyana Agricultural Research and Development Board to encompass the roles currently being performed by NARI, NDDP, NGMC, and the Crops and Livestock and Fisheries Departments of the MOA and the MFCL. As of June 2003, discussions on the recommendations were still ongoing.

Guyana has joined with other CARICOM countries to contribute a number of proposals and submissions to the WTO negotiations on agriculture. For example, submissions have been made on the Green Box and food aid, together with Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago. The same group of countries also tabled a submission on export competition and domestic support. Guyana is one of the promoters of the Sustainable Agricultural and Rural Development (SARD) initiative, launched in a G77-country meeting in Georgetown, and which resulted in the Georgetown Declaration on Sustainable and Competitive Agriculture. This declaration noted that agriculture must be promoted as a complex of social, economic, and technological inter-relationships, based on the active involvement of a wide range of participants, providing multiple and diverse opportunities for business, adding value, and conserving natural resources.

The authorities hold the view that the regularization of land tenure is an important component in development of the agriculture sector. They note that efforts have been undertaken to streamline the bureaucratic process with respect to lease issuance, and to improve the land tenure information maintained by the Lands and Surveys Commission, with assistance from the U.K. Government as part of the Guyana Lands and Surveys Project (GLASP).[3] The lease term of state lands has been extended from 25 to 50 years. Up to early 2003, over 5,600 agricultural leases covering 136,000 acres had been issued to farmers.

3 Market access

Tariffs on agricultural products are generally higher than those on industrial goods. Products falling within the WTO definition of agriculture are subject to an average tariff of 21.6%, compared with 12.1% for all products. Applied tariffs range between 0 and 100% for spirits and tobacco products. Products under headings HS 01 to 24 face an average tariff of 23.8%. Among the main categories of agricultural products, animals and products thereof must pay an average tariff of 25.4%; dairy products are subject to an average tariff of 14.2%; coffee and tea, cocoa, and sugar to 19.1%; fruit and vegetables to 25.5%; grains to 16.0%; oilseeds, fats, and oils to 16.6%; beverages and spirits to 49.3%; and tobacco to 71.5% (Table III.3). The highest tariff rates are applied on goods competing with domestic or CARICOM production. Products imported from other CARICOM countries are generally duty free, with the exception of alcoholic beverages, which are subject to tariffs between 20% and 30%, vinegar (5%), and ginger and curry (30%) (Table III.4). Some agri-industrial products (mainly alcoholic beverages and tobacco products) also face high consumption tax rates (50% and 128% respectively).

Tariffs on agricultural products were bound in the WTO at a ceiling rate of 100%. Other duties and charges were bound at 40%, with a few exceptions (Chapter III(2)(ii)(c)).

Guyana applies no quantitative restrictions on the importation of agricultural products, nor does it use tariff quotas. However, a large number of animal and vegetable products are subject to import licensing requirements, as notified by Guyana to the WTO (Chapter III(2)(vii) and Table AIII.2). Imports of some products are also subject to SPS requirements: the Food and Drugs Act requires that the importation of livestock, and other animals, and of plant materials into Guyana, be subject to an import permit from the Animal Services Division (animals) or the Plant Quarantine Section (plant materials) of the Ministry of Agriculture (Chapter III(2)(xi)).

4 Measures of support

Guyana does not provide export subsidies, and has made a notification in this respect to the WTO.[4] No base or annual total AMS commitment levels exist in Part IV of Schedule CXII (Guyana). Guyana has notified to the WTO that it does not provide non-exempt support to agricultural producers.[5]

A number of programmes have been notified under the WTO Agreement on Agriculture as Green Box measures. With respect to general services, current expenditure activities by the Crops and Livestock Department of the MFCL, as well as those of the National Agricultural Research Institute (NARI) and the National Dairy Development Programme (NDDP), have been notified. Also in the Green Box are the training programmes of the Guyana School of Agriculture and the Regional Education Programme for Animal Health Assistants (REPAHA). The government allocation to the Guyana Marketing Corporation (GMC) has also been included. A number of infrastructural service programmes, mostly financed or co-financed by international agencies, also feature in the notifications. In the domestic food aid component, Guyana has included purchase of food, and food-for-work programmes.

Among the infrastructural programmes notified, the MOA supports drainage and irrigation for approximately 115,000 hectares of irrigated crop production (mostly sugar and rice) in the coastal plains. Approximately half of the MOA's capital budget is devoted each year to drainage and irrigation works.

The objective of the Agricultural Sector Programme (ASP) is to introduce policy reforms to improve the efficiency of drainage and irrigation and of administration of public lands, while improving the environmental framework and consolidating trade liberalization. The ASP is being executed under two contracts, both concluded in August 1996 between the Government of Guyana and the Inter-American Development Bank (IADB). The first contract, the Agricultural Sector Loan (ASL), provided US$34 million to meet the cost of eligible imports and bank expenses associated with general inspection and supervision. The second, the Technical Cooperation Programme (TCP), provided financing up to the equivalent of US$6.6 million. To manage the programme, a Policy Coordination Unit (PCU) for the ASP was created in the MOA.

The FAO Telefood Special Fund aims to increase access to and production of food in developing countries by providing support to poor farmers and vulnerable groups. Three such projects have been funded within Guyana dealing with the rearing of poultry and with crop production.

The National Dairy Development Programme (NDDP) was created in 1984 with the objective of achieving national self-sufficiency in fresh milk by 1988. Subsequently, the NDDP's mandate was expanded to seek the development of a self-sustaining, self-regulating, economically viable cattle industry within the context of national self-sufficiency in milk and dairy products, and beef and beef products. The NDDP was also mandated to seek and promote the exportation of these commodities. Up to early 2003, the NDDP had established 582 nurseries, small and large farmers units, and communal forage plots totalling 6,000 acres of improved grass. It had also increased milk yield substantially. The authorities nevertheless report that self-sufficiency has not been achieved because of the competition for land usage on the coast where dairy cattle are situated. The domestic industry finds it difficult to compete with imports of powdered milk products, which benefit both from duty-free entry and the attraction of a lengthy shelf life. The NDDP encourages the formation of cattle farmers associations; some 44 are currently registered. In 2002, three regional cattle farmers associations were formed, as well as a national association.

5 Main crops

1 Sugar and sugar-derived products

Sugar and sugar derived-products account for 16% of Guyana's GDP and 30% of its agricultural GDP. The industry is the largest net earner of foreign exchange and the biggest contributor to public revenue; it directly employs 25,000 people, or 10% of Guyana's labour force, and it is estimated that it employs the same number indirectly. Guyana supports the view that sugar production has enormous spillover effects on the rest of the economy, for example, in retail and distribution and in maritime transport services.

The sugar sector is export-oriented. In 2001, exports accounted for almost 90% of production; the rest was consumed in the home market. The main export markets are the European Union, the United States, and CARICOM countries, all under some type of preferential scheme (see below). Sugar exports totalled US$109.2 million in 2001. Exports of unrefined cane sugar (tariff heading 17.01) are subject to a tax of G$1 per tonne.

The Guyana Sugar Corporation (GUYSUCO) is the largest employer in Guyana, with a payroll of about 18,000, and a wage bill of some US$63.5 million in 2000. GUYSUCO was created in 1976 by the Government's nationalization and merger of the sugar estates operated by Booker Sugar Estates Limited and Jessels Holdings. It now operates five sugar estates comprising 164,000 acres, and runs eight factories (four in Demerara and four in the east of the country on the banks of the Berbice and Corentyne Rivers). GUYSUCO is still the only producer of sugar, and exports all cane products other than rum. Although state-owned, GUYSUCO has been managed since 1990 under a contract with the privately owned British company Booker-Tate. The Government announced plans in early 2003 to introduce a new management contract, with an incentive structure that emphasizes profitability in a sustainable manner.[6]

The sugar industry suffered a period of crisis in the late 1980s and early 1990s, with output dropping from some 395,000 tonnes in the early 1970s to about 130,000 tonnes by 1990. Since then, however, production has increased (Table IV.2). Production reached 331,057 tonnes in 2002, a 16.4% increase over 2001; and earnings from sugar exports reached US$119.5 million.[7] The authorities report that the target for 2010 is to have increased production to 450,000 tonnes and a reduction in costs of production to a level where Guyanese sugar could be competitive in the world market.

Guyana is a high-cost sugar producer compared with other countries. GUYSUCO's estimated cost of production is US$0.18/lb; this is higher than other producers in developing countries such as Brazil, Mauritius, India, and Fiji, but also above the costs of production in the United States.[8] Production costs are not evenly distributed across Guyana; they are higher in the Demerara estates (Wales, Uitvlugt, LBI, and Enmore) than in the other four estates (Skeldon, Albion, Rose Hall, and Blairmont).

Due to its relatively high costs, the industry depends heavily on its preferential access to foreign markets. The ACP/EU Sugar Protocol, the EU Special Preferential Sugar Agreement, and the U.S. Sugar Programme all grant access to imports from Guyana at prices higher than world-market prices (Table IV.2). Guyana's exports of sugar also benefit from duty-free access to CARICOM markets, where MFN imports of sugar face a 40% tariff. In 2002, direct exports to the EU accounted for more than half of the volume and nearly two thirds of the value of Guyana's sugar exports. The EU was responsible for another 11.9% (by volume) under the Special Preferential Sugar Agreement. Other major export markets, by volume, were CARICOM (21.2%), the United States (4.3%), and Haiti (2.7%) (Table IV.3).

Table IV.2

Main indicators of the sugar industry, 1990-02

(Tonnes and U.S. cents per lb)

|Year |Production |EU import price |U.S. import price |Brazil price |

|1990 |129,920 |26.45 |23.25 |15.94 |

|1991 |162,245 |27.77 |21.55 |11.87 |

|1992 |246,898 |28.48 |21.30 |11.12 |

|1993 |248,522 |28.10 |21.61 |11.61 |

|1994 |256,857 |28.20 |22.03 |13.14 |

|1995 |253,837 |31.21 |23.06 |13.75 |

|1996 |280,116 |31.15 |22.36 |13.1 |

|1997 |276,392 |28.38 |21.93 |12.34 |

|1998 |254,668 |27.13 |22.06 |10.37 |

|1999 |321,438 |26.84 |21.14 |6.74 |

|2000 |273,317 |25.16 |19.40 |7.95 |

|2001 |284,406 |23.88 |21.34 |.. |

|2002 |331,057 |23.00 |18.00 |8.00 |

.. Not available.

Source: Guyana Sugar Corporation; Bank of Guyana, and information provided by the authorities.

The ACP/EU Sugar Protocol (SP), which took effect in 1975, is of particular importance for Guyana due to the large market share of its exports to the EU. The SP is a government-to-government agreement covering individual agreed quantities of cane sugar for each ACP party, as well as guaranteed prices. The SP has an indefinite duration, and is annexed to the Cotonou Agreement. Guyana's agreed quantity under the SP is 159,410 tonnes of white sugar equivalent or 167,000 tonnes per year. ACP guaranteed prices are negotiated annually between the EU and the ACP states signatory to the SP.[9]

Table IV.3

Breakdown of sugar exports by destination, 2000-02

|Destination |Quantity exported |Value exported |Unit value |

| |(tonnes) |(G$ million) |(G$/tonne) |

| |2000 |2001 |2002 |2000 |2001 |2002 |2000 |2001 |2002 |

|EU SP Protocol |179,222 |163,642 |158,426 |15,721.9 |14,583.0 |15,391 |87,723 |89,115 |97,149.5 |

|Special Preferential Sugar Agreement |31,757 |31,912 |33,720 |2,385.4 |2,415.0 |2,848.7 |75,114 |75,677 |84,481.0 |

|United States |24,253 |12,094 |12,184 |1,533.2 |905.0 |926.4 |63,217 |74,830 |76,034.1 |

|CARICOM |42,038 |44,683 |60,043 |2,465.2 |2,601.0 |3,563.3 |58,642 |58,210 |59,345.8 |

|Total |277,270 |252,331 |282,659 |22,105.7 |20,504.0 |23,257.8 |79,726 |81,258 |82,282.0 |

| |Share of total |

|EU Protocol |64.6 |64.9 |56.1 |71.1 |71.1 |66.2 |110.0 |109.7 |118.1 |

|Special Preferential Sugar Agreement |11.5 |12.6 |11.9 |10.8 |11.8 |12.2 |94.2 |93.1 |102.7 |

|United States |8.7 |4.8 |4.3 |6.9 |4.4 |3.9 |79.3 |92.1 |92.4 |

|CARICOM |15.2 |17.7 |21.2 |11.2 |12.7 |15.4 |73.6 |71.6 |72.1 |

|Total |100.0 |100.0 |100.0 |100.0 |100.0 |100.0 |- |- |- |

Source: Guyana Sugar Corporation and information supplied by the authorities.

Guyana has also traditionally benefited from the Special Preferential Sugar Agreement between the EU and ACP states, reached on 1 June 1995, initially for six years. Under the agreement, the EU undertook to open annually a special tariff quota for the importation of raw cane sugar for refining that originates in ACP states, on the basis of the needs determined by the European Commission. The conditions of the Special Preferential Sugar Agreement include a minimum delivered price to be paid by EU refiners, equivalent to approximately 85% of the ACP guaranteed price for raw sugar. Quantities are determined annually for each marketing year (July-June).

The United States Department of Agriculture issues sugar quotas under the Tariff Rate Quota system on a country-by-country basis. Under this system, raw sugar is allowed to enter duty-free into the United States. Guyana's quota in 2002-03 was 12,636 tonnes raw value.

The sugar industry suffers from inadequate infrastructure and equipment. According to the National Development Strategy, even though extensive repairs have been undertaken in recent years and much of the old farm machinery replaced, the eight sugar mills in Guyana are generally obsolescent and are hampered by a low capacity, which prevents GUYSUCO from making the overall productivity gains that the industry needs to become competitive.

To respond to this and other challenges, GUYSUCO formulated a plan in 1998 aimed at making it an entrepreneurial, customer driven, retail-market-oriented producer of top-quality sugar and associated value added by-products, at a cost that will enable it to compete in any foreseeable market environment.[10] The Strategic Plan 1999-08 for the sugar industry seeks to reduce unit costs to a level that will ensure viable and sustainable operations in the anticipated future markets. The strategy is to concentrate investment on increasing production in the lower cost areas of Berbice; to maximize the use of the best class of lands; and to develop larger processing facilities that benefit from economies of scale and more modern technology. However, the plan envisages continued operations in the less favourable areas where, despite their cost disadvantages, it can be demonstrated that they are making a net contribution to the economy. It foresees the construction of a new factory at Skeldon, the expansion of an existing one in Albion, and the closure of the Rose Hall mill; with these changes it intends to bring production levels up to 457,000 tonnes per annum, and unit costs down to US$0.1261 per pound, including depreciation. To increase productivity, the plan envisages the restructuring of the administration and management of the estates and at the corporation's head office, the amalgamation of contiguous estates, the mechanization of cane loading, the introduction of more modern processing technology into existing factories, and the out-sourcing of a range of activities and services.

The cost of the project is estimated at US$187 million, financed through a combination of self-generated funds (US$85 million over the plan period); sales of land (US$30 million); and borrowing (US$72 million). GUYSUCO estimates a resulting increase in gross foreign exchange earnings to a minimum of US$145 million per year, and net earnings of US$80 million. The plan assumes that the current preferential markets will remain although at reduced prices but with similar allocation levels, and that Guyana will increase sales to other CARICOM countries in which sugar production has declined.

The authorities report that the building of a sugar refinery is being seriously considered in order to satisfy the CARICOM market's refined sugar requirements. Other ventures are also being planned, such as a joint development of a distillery to generate revenue from the increased molasses produced, as well as co-generation of electricity for the national grid.

GUYSUCO is developing an environmental management system for the cultivation of sugar-cane and the manufacture of sugar and its by-products, which will be in conformity with ISO 14001. GUYSUCO collaborates in this with the EPA. As part of its efforts to manage the environmental effects of sugar-cane cultivation, GUYSUCO uses bagasse (the fibre remaining after the cane juice has been extracted) to generate power for use in the factories.

Guyana also produces rum and molasses from its sugar. Until recently, Guyana was strictly a producer of bulk rum; the country's rum industry now distils a premium product that fetches much better prices in export markets. This industry is heavily protected, since MFN imports face a 100% tariff. Imports from other CARICOM countries had been subject to a 20% tariff, but this has been waived by the Ministry of Finance. The producers in this subsector also make soft drinks, beer, malt, and wine. The two major operators are DDL and Banks DIH, while the smaller operators are devoted primarily to the manufacture of soft drinks (another downstream product of the sugar industry).

One issue of interest to Guyana is the use of the term "Demerara" as a geographic indication for both sugar and rum. Demerara sugar, which is a special type prized for its use in making deserts, is named after the Demerara region of Guyana. While the process for making this yellow sugar was originally developed in Guyana it has also been employed by other countries, some of which market the product under the Demerara name. Rum producers in Guyana have had success in the sale of a premium product under this same name, and the potential for obtaining unique rights for Demerara sugar are now under study.

2 Rice

Rice is second only to sugar in its importance to Guyana's economy. There are some 18,000 farm families involved in rice cultivation and thousands more in milling, exporting, transportation, and other activities linked to the industry. It is estimated that 20% of the population depends directly on the rice industry. Rice accounts for 4% of GDP and about 10% of total exports.

Rice production fell dramatically during the 1980s, partly due to the effect of price controls, which discouraged production. The industry was also characterized then by strong government intervention and subsidies, and a low level of international competitiveness. During the 1990s, the rice industry showed major increases in the acreage harvested, and the quantity produced and exported (Table IV.4). Much of this success is attributed to the removal of price controls, and the privatization of the milling and export industries. The authorities also credit an increase in drainage and irrigation activity after 1992, better marketing, the freeing up of foreign exchange controls, and improved land tenure. In 2002, Guyana produced 287,755 tonnes of rice, representing a 10.7% decline from 2001 levels; exports, at US$45.4 million were 9.6% below 2001 levels.[11]

Productivity in the rice industry has improved considerably; per-acre yield rose by 45% between 1975 and 2001 (Table IV.4). These improvements however appear to have reached a plateau in recent years, and while the volume of rice exports has been fairly steady, the prices obtained in foreign markets have dropped sharply. Moreover, average yields still seem to be well below potential and are inferior to those of other South American countries.[12] Low processing efficiency is also a major concern.

Table IV.4

Rice statistics, 1975-01

(Year to year percentage change, unless otherwise specified)

| |1975 |1980 |1985 |1990 |1995 |2000 |2001 |

|Acreage harvested |267,961 |237,100 |192,110 |126,878 |326,892 |286,204 |307,676 |

|Yield per acre (tonne) |1.11 |1.19 |1.35 |1.23 |1.61 |1.57 |1.61 |

|Rice equivalent (tonne) |172,259 |169,107 |156,124 |93,444 |315,301 |291,967 |322,310 |

|Quantity exported (metric tonne) |82,035 |81,008 |29,339 |50,943 |200,336 |207,638 |209,042 |

|Value exported (G$ million) |84.9 |87.5 |56.6 |513.2 |.. |.. |.. |

|Value exported (US$ million) |.. |.. |.. |.. |76.4 |51.8 |50.1 |

.. Not available.

Source: Adapted from Guyana Rice Development Board (2002), Annual Report 2001, Appendix I.

Although the Ministry of Agriculture has overall responsibility for the policies of the rice industry, the Guyana Rice Development Board (GRDB), and the Guyana Rice Producer's Association (GRPA) play key roles in the planning and overseeing of the subsector. The GRDB was established in 1994, with representation from GRPA and the Guyana Millers and Exporters Development Association (GRMEDA), to develop the rice industry and promote the exportation of rice. Through their involvement in the GRDB and GRPA, farmers and millers participate in decisions regarding the industry. The GRDB plays the role of a facilitator of selected activities within the rice industry, which is now almost completely in the hands of the private sector. The GRMEDA is the representative organization of rice millers, exporters, and other rice industry operators. Its mission is to promote the development of the rice industry through the design and execution of appropriate programmes and to function as a channel for technical and financial assistance to rice industry operators.

Rice exports are subject to fees of US$2.50 per tonne for rice by-products, US$3 per tonne for broken rice, and US$6 per tonne for whole grain rice. The revenue from these export fees is devoted to funding the operations of the GRDB. Guyana has long enjoyed a preferential market in the EU via the Lomé Convention and more recently the Cotonou Agreement. Guyana has been successful in broadening its marketing base by increasing sales in the Caribbean and currently supplies 50% of the CARICOM market. As a result, virtually all of Guyana's rice exports go to these two markets, at prices above the world market. In 2002, over 59.3% of Guyana's rice exports went directly to the EU, and another 5.9% was shipped to the EU via rice mills in the Caribbean. CARICOM countries imported the remainder.[13]

Preferential access has made exports to the CARICOM and the EU markets very profitable, but the high prices in each of them have attracted greater competition from other suppliers. A dispute over Jamaica's imports of duty-free rice from outside CARICOM was resolved in early 2003 though a negotiated settlement between Jamaica and Guyana. In the EU market, Guyana shares an ACP quota of 125,000 tonnes of rice. It also has access to the EU market via the OCT (Overseas Countries and Territories) route. Guyana's access to the EU market via the OCT route has, however, been limited by a safeguard action brought by European producers in 1997. Prior to that action, Guyana's access to the EU market was not limited by quota, and it had exported about 200,000 tonnes of rice per year. Following the imposition of a safeguard action, however, Guyana is now limited to a 35,000-tonne OCT quota of levy-free rice, which it shares with Suriname. Guyana supplies the majority of the rice under this quota. Guyana's rice producers are concerned that the rules of origin under the EU's Everything But Arms (EBA) initiative may have an impact on their access to the EU market, by conferring LDC origin on rice that is grown in non-LDCs but is milled and imported into the EU from the EBA beneficiary countries.

The authorities report that the rice industry is still suffering the effects of the limitations set on the OCT export route to the EU rice market. They note that overly enthusiastic investment, made as a result of the temporary OCT window of sales into Europe, has left many in the industry facing bankruptcy. With the threat of loss of market and reduced preferences to the EU, focus has shifted to supplying the local CARICOM market. The authorities note that the difficulties here include competition from subsidized U.S. rice.

According to the Ministry of Agriculture, the future of Guyana's rice industry will rely heavily on advances in research, the development of value-added products, and improvements in its global competitiveness.[14] The Government is working to secure financial assistance from the EU for a comprehensive restructuring of the rice industry; it is hoping to obtain €24 million to finance the national plans of Guyana and Suriname.[15] The threats posed to Guyana's preferential access to rice markets, coupled with production difficulties and a high debt load, led the rice industry to adopt a plan to restructure the sector in 2001.[16] The plan, initiated by the GRDB and funded by the IADB, envisages an integrated, sustainable, and profitable industry producing and marketing rice in a ten-year time span. The goals of the plan include increasing productivity and production on a sustainable basis. Productivity is expected to increase by almost three quarters, to 7 tonnes/hectare by 2007; it is also expected that 70% of growers will use high quality seed and adequate inputs by 2004. Other goals include exporting 60% of rice production to CARICOM by 2003, and 20% to non-traditional markets. The plan envisages an increase in profit margins by adding value to rice and its by-products, through, for example, increasing the percentages of parboiled and packaged rice production to 25% and 10% of whole grain production by 2006.

The rice industry has also benefited from an agreement that the Government of Guyana negotiated with the banking sector in early 2002, providing for debt and tax relief for smaller rice farmers..[17] Among the elements of the agreement were a waiver of unpaid interest on certain non-performing loans; suspension and eventual write-off of 25% of the principal on non-performing accounts; the rescheduling of principal over a maximum of ten years; and a moratorium on principal payments to the end of 2002. In exchange, banks are to receive corporate tax relief on the write-back of bad debt provisions and on all payments made on new category loans. The authorities reported that the Government will not lose anything from the tax breaks to the banks because it would not have received any tax revenue if there were no repayments on the non-performing loans. The banks reported that there was some reluctance on the part of the farmers to sign on to the new arrangement because of concerns with the new mechanism for realizing collateral. Most of the affected loans were at various stages of the restructuring process in June 2003; the process completed for about a third.

The 2002 debt-relief package was designed to benefit smaller farmers, insofar as it did not cover the debts of about 100 large-scale rice farmers; the larger producers were expected to deal with the banks on an individual basis. In June 2003, larger rice farmers became eligible for loan restructuring on a case-by-case basis. The Government reportedly agreed to grant tax relief on interest income from the restructured loans. This arrangement covers fewer farmers but more debt than the deal made with small farmers in 2002. In 2001, the large farmers were responsible for G$7 billion of the total rice sector debt of G$12 billion.[18]

3 Poultry

Poultry meat production is increasing. The authorities note that Guyana is currently self-sufficient in eggs and 80% self-sufficient in poultry meat, and that the country has begun to export eggs to Suriname.[19] The poultry industry comprises about 3,400 enterprises including 300 pluck shops, four processing plants, 50 commercial farms, 3,000 small farmers, 12 hatcheries, 80 trucks, and four stock-feed factories. It employs some 5,000 people.

Like other producers in the Caribbean Basin, Guyana's producers have concerns over the competitiveness of the industry vis à vis major producers in North America. A recent regional study concluded that, on the basis of the importance of the broiler industry in CARICOM and given its vulnerability to low priced imports, a clear case existed for treating the industry as sensitive.[20] In this respect, imports already face relatively stringent market-access conditions since, in addition to the 100% tariff imposed on most chicken cuts, imports of poultry into Guyana require a sanitary permit.

The Ministry of Fisheries, Crops, and Livestock (MFCL) implements a Livestock Development Programme to promote efficiency in the rearing of poultry, cattle, swine, sheep, and goats. The aim is to increase production and productivity and attain self-sufficiency of livestock and livestock products.

4 Horticulture and processed products

In the 2002 Budget Speech, the Government noted its plans to introduce sustainable cut-flower, honey, and integrated fish and crop farming industries.[21] Guyana may also benefit from the niche marketing of such specialities as organic sugar, cocoa, peanuts, and cashew nuts. In this respect, a peanut production programme has been put in place with the aim of improving the volume and quality of the product to suit local and overseas markets. Organic farming programmes have been started, with the rehabilitation of 100 acres of cocoa plantations, and an export target of 50,000 pounds per year, mainly to Europe.

Exports of non-traditional agricultural products may be facilitated as a result of effective fruit-fly trapping programmes. In early 2003, the United States began to permit the importation into Miami of cucumbers, peppers, eggplant, and pumpkins from Guyana.

3 Fisheries

Fisheries account for some 3% of GDP. Exports in 2001 exceeded US$50 million, of which shrimp exports totalled US$49.3 million. Exports of shrimp had faced a 10% export duty, but this has been waived by the Ministry of Finance since 1997; exports of aquarium fish are subject to a 5% levy. Imports of fish and fish products face a relatively high average tariff rate of 27.7%, ranging up to 40%.

Guyana's fishing fleet consists of around 120 trawlers based in Port Georgetown; they exploit the waters in the continental shelf. Their main objective is the smaller shrimp and fin fish that are found in depths of 13 to 30 metres. Another 65 ships are based in Guyana but are foreign-owned, and fish for larger prawns at depths of 25 to 90 metres. Guyana also has a fleet of some 1,200 artisanal boats that fish in river mouths, and near the shore at shallow depths.[22]

The Ministry of Fisheries, Crops, and Livestock is responsible for policies in the fisheries sector. A Fisheries Advisory Committee has been established to advise the Minister on matters affecting the industry. The authorities have noted that R&D subsidies are provided to the industry, but that no direct support is granted.

The Fisheries Act No. 12 of 2002, which replaced the Fisheries Act, 1957 (Cap. 71:08) regulates fisheries in Guyana. It provides for the registry of fishing boats with the Chief Agricultural Officer, the inspection of vessels, and the licensing of fishing operations, both domestic and foreign. Foreign fishing vessels may be granted licences if they are locally based, or if they engage in test fishing, unless there is a fishing agreement with the flag country.

The Maritime Boundaries Act, 1977 (Cap. 100:01) establishes a territorial sea of 12 miles and a fishery zone that extends 200 miles out from the baseline of the territorial sea. Foreign ships, other than warships, enjoy the right of innocent passage through the territorial sea. The law also gives the President the authority to designate an exclusive economic zone in an area beyond and adjacent to the territorial sea. Research and other activities can be conducted in such a zone with a licence from the Government of Guyana. The law declares Guyana's full and exclusive sovereign rights over the seabed and subsoil resources of the continental shelf, while also providing for the licensing of operations by domestic or foreign persons.

Some aquaculture projects have been developed in recent years and the cultivated acreage has risen from 2.5 acres in 1997 to over 2,000 acres in 2002. A freshwater aquaculture demonstration farm and training centre has been set up at Mon Repos, East Coast Demerara, to promote freshwater aquaculture development by providing on-site training of farmers. The project is funded by the Canadian Development Agency (CIDA), FAO, and the Government of Guyana.

4 Forestry

Forestry accounted for some 2.2% of GDP in current Guyana dollars in 2001. It is estimated that Guyana has 14,000 square miles of commercial forest; another 40,000 square miles of forest are potentially commercial.[23] Export earnings in 2002 were US$35.6 million.[24]

The Ministry of Fisheries, Crops, and Livestock with Responsibilities for Forestry oversees policies in the sector; it is trying to promote value-added activities. The forestry sector is regulated by the Guyana Forestry Commission (GFC) under the authority of the Forests Act of 1953 (Cap. 67:01), as amended. The law provides for the issuing of exploratory permits: it specifies that only citizens of Guyana may be granted permits as individuals, but either domestic or foreign corporations may be granted such permits; a similar law governs minerals and petroleum. The law makes these permits contingent upon various factors, including the applicant's proposals for the employment and training of Guyanese. Any area of State land may be declared a State forest, and the law mandates that all forest produce from State forests remains the property of the State until the prescribed royalty thereon has been paid. The GFC has the authority to sell timber from State forests, or to issue permits for the harvesting of timber in these forests. The law authorizes the MFCL to prohibit or regulate the export of forest produce from State forests and to prohibit or regulate the importation of sawmill equipment (Article 45(c) and (j)).

The GFC monitors forest operations to ensure compliance with its operational and environmental standards. It has established a 24-hour monitoring unit to reduce the incidence of illegal activities by loggers, and is aiming to have Guyana certified internationally as an exporter of wood and wood products in accordance with environmentally friendly practices.

The Guyana Forestry Commission produced a draft National Forest Plan in 2001. The overall objective of this plan is the conservation, protection, management, and utilization of Guyana's forest resources, while ensuring that the productive capacity of the forests for both goods and services is maintained or enhanced.[25] Among the points emphasized in the plan is the need to promote export trade and underpin this with research and development aimed at both processing and marketing, as well as offering training and extension programmes. The plan called for the approval of a new Forests Act. Revised legislation is currently being reviewed by a Cabinet subcommittee. When approved by the Cabinet, the legislation will be sent to Parliament.

There is substantial foreign involvement in Guyana's forestry sector. Among the major foreign investors are: Caribbean Resources Ltd., owned by the Colonial Life Insurance Company (Trinidad and Tobago); the Barama Timber Company, a joint South Korean/Malaysian venture; Demerara Timbers Ltd., owned by a consortium of European banks; and the UNAMCO/Case Timbers, a Guyanese/Malaysian enterprise that manufactures plywood. Some of these investments in the sector are the result of privatization in the late 1980s and early 1990s, such as by the purchase of the formerly state-owned Guyana Timbers by Caribbean Resources, and Demerara Timbers' purchase of assets that were held by the state-owned Demerara Woods.[26] In 2000, Jilin Industries (Guyana) Inc. of China, and Forest Enterprise Limited of the Netherlands committed to new investments of some US$32 million in Guyana's forestry sector.

In July 2002, Guyana signed its first conservation concession. In a letter of approval with Conservation International, the country agreed to a 30-year concession to 81,000 hectares of forest in the Upper Essequibo-Upper Takutu region. In addition to an initial payment, the agreement provides for the payment of annual royalties and acreage fees.[27]

In 1996, the Government imposed a moratorium on new logging permits, pending the completion of a project that is expected to increase the Government of Guyana's capabilities to enforce sustainable forestry regulations. The moratorium was lifted in 1999.

5 Mining

1 Features

Mining accounted for some 16% of GDP in 2001. In 2002, exports of bauxite totalled US$35.3 million (down from US$61 million in 2001). Gold is taking over as the main earner of foreign exchange, with US$136.3 million of exports in 2002 (up from US$127 million in 2001).[28] It is estimated that the industry directly employs between 15,000 and 20,000 persons. Although the industry per se is capital-intensive, it requires a considerable range of support services, such as metal fabrication, machine construction and repair, transportation, carpentry, plumbing, welding, pipefitting, and blasting, some of which are labour-intensive. Most of the investment in mining over the last decade has been by the private sector.

In addition to its deposits of gold, diamonds, and bauxite, Guyana's natural resources include industrial minerals such as kaolin, silica sand, soapstone, kyanite, feldspar, mica, ilmenite, columbite-tantalite, and manganese; the base metals copper, lead, zinc, molybdenite, tungsten, and nickel; ferrous metals, mainly comprising iron as magnetite and laterite; uranium; and semi-precious stones such as amethyst, green quartz, black pearl, agate, and jasper.

The mining sector has expanded in recent years, but continues to face problems. One difficulty is a high level of taxation by international standards. While import duties on mining equipment are generally waived, several mining inputs face customs duties of 15% or 20%. Export duties are levied on all mining products (see below). It may be difficult for local miners to obtain investment capital to develop their permits, due to credit access barriers and high borrowing costs; the authorities note that the underlying problem is the inability of prospectors to supply the required information to the banks when seeking loans. The high cost of shipping also diminishes Guyana's exports competitiveness, particularly in the bauxite subsector; this is partly due to the limited depth of the approach channels to the Demerara river, from where bauxite is shipped, which allows vessels to load a maximum of 22,000 tons capacity.[29] Dredging in the Berbice River has freed it up for larger ships.

2 Regulatory framework

The Prime Minister holds the portfolio of mines, and is responsible for the formulation and implementation of policy. The Guyana Geology and Mines Commission, which is attached to the Prime Minister's office, regulates this sector. It is in charge of granting licences.

The Mining Act, 1991 (Cap. 65:01) is the principal regulating statute. The Act declares the right of the State to resources, while also creating the system by which licences may be granted for the extraction of these minerals.[30] The law establishes the procedures for the granting, renewal, and exercise of licences for prospecting and mining. Mining licences are granted for a maximum of 20 years; renewals are for periods of seven years. Prospecting licences may be granted for a maximum of three years, renewable for periods of no more than a year each time. Special permits are required for the exportation of radioactive materials.

Operations are designated as small-scale (up to 27 acres), medium-scale (up to 1,200 acres), or large-scale. Small and medium-size operations can be owned only by Guyanese. There are also differences in the regulatory environment; the arrangements made with large-scale operations are very formalized and subject to more specific requirements (e.g. the preparation of feasibility studies). While small-and medium enterprises are allowed to prospect and mine at the same time, this is not permitted for the large-scale producers. However, there are fiscal incentives specific for large-scale mining, through the granting of a mineral agreement with the Government.

Licences may be granted to individuals or companies. While foreign corporations may operate large-scale properties either alone or in joint ventures, small-and medium-scale operations open solely to citizens of Guyana. Foreign individuals may not be granted prospecting or mining licenses; these may only be granted to individuals who are nationals of Guyana (Article 17(1)). Prospecting licences for large-scale operations may be denied for various reasons, including a determination by the Guyana Geology and Mines Commission that an applicant has not made satisfactory proposals for the employment and training of citizens of Guyana (Article 30(2)(c)). The authorities indicated that this provision has never been the cause for the denial of an application. A similar condition applies to the granting of mining licences for large-scale operations, which must also take into account the applicant's proposals with respect to the procurement of goods and services obtainable within Guyana (Article 46(1)).

Royalties must be paid on minerals, and the law permits the authorities to specify that these royalties be paid in foreign currency. Royalty rates are set at 1.5% for bauxite, 3% for sand and stone, between 3% and 5% for gold (on a sliding scale that rises with the world price), either 3% or 5% for diamonds (the lower rate applies to small-and medium-scale enterprises; there are currently no large-scale operations for diamonds), and 5% for other precious metals and minerals. Mining companies are also subject to a 35% corporate income tax. Exports of all mining products are subject to a 1.5% export tax, with the exception of precious stones (subject to a tax of G$3 per metric carat). Bauxite is in principle subject to an export tax of G$0.45 per tonne, but this tax is currently waived by the Government.

3 Main products

1 Bauxite

Bauxite production has been under way in Guyana since 1917. Originally developed by U.S. (Reynolds) and Canadian (Alcan) firms, the industry was nationalized with the creation of the Guyana Mining Enterprise Limited (Guymine, 1971) and the Berbice Mining Enterprise (Bermine, 1975). The first replaced the Alcan subsidiary, Demerara Bauxite Company (DEMBA), and the second the Reynolds subsidiary, Reynolds Berbice Mines. Three firms currently operate in Guyana: two are state-owned, Linmine and Bermine; the third is the Aroaima Bauxite Company (ABC), initially a 50/50 joint venture between Reynolds International (United States) and the Government of Guyana. ABC's total investment in Guyana was US$100 million, including the company's deep-water port facility at the mouth of the Berbice River.[31]

The bauxite industry initially exhibited sustained growth, but a considerable decline became evident by 1981. A decade later it was practically bankrupt. In 1991, the Government received World Bank financing to revive the industry before its divestment. The dissolution of Guymine was set as a precondition for this assistance. It was replaced by Bermine, which continued under local management, and Linden Mining Enterprise (Linmine), which was placed under foreign management and subject to an Initial Reconstruction Programme (IRP). Attempts to redress Linmine's situation failed. Employment of bauxite workers in the town of Linden had fallen from 4,000 to just 700 as of early 2003. The production of refractory bauxite declined in an environment of plummeting prices. The market expressed little interest in the proposed privatization of  Linmine in 1996. The company's profitability did not improve during the five-year grace period that the Government opted to provide, leading to yet another try at privatization in 1998. This process also failed. As of early 2003, the Canadian firm Cambior was in the process of recapitalizing Linmine. The deal will lead to Cambior owning 70% of the venture, and the Government retaining 30%. The firm signed an initial agreement to this effect in June 2002; in April 2003, it was anticipated that the process might be finalized within three to six months.

Bermine's performance was slightly better than Linmine's and privatization was also attempted in 1998. The Government rejected a tentative offer by ABC in 2000 for a merger with Bermine. In November 2001, the Aroaima joint venture between Alcoa and the Government came to an end. Alcoa handed its shares in the company to the Government for US$1. Since then, the Government has been running the company on a cash-neutral, non-subsidized basis. In September 2002, Bermine was restructured and the management of its operations passed to ABC. Plans are under way to merge Bermine and ABC fully, and to privatize the combined company as soon as possible.

Linmine and Bermine control considerable bauxite reserves, but their scale of operations is well below the minimum necessary for commercial viability. Linmine's costs of production are above the price received for its product; its losses are met by the Treasury. High costs of production are partly due to difficult exploitation conditions (considerable depth of overburden), high costs of transportation, and the cost of providing a number of community services.

Bauxite production declined in both 2001 and 2002 to reach 1.6 million tonnes (18.9% below the 2001 level). The Government has expressed the hope that the actions taken in 2002 will result in a turnaround of the industry's production and profitability in the near future.[32] The authorities report that the Government is looking for strategic partnerships to lower the costs of production and to improve the viability of the industry, and is open to majority ownerships.

2 Gold

Although designated as a "non-traditional" export to differentiate it from sugar, rice, and bauxite, gold mining has a long history in Guyana; large-scale production began in the 1880s.[33] As mentioned above, gold now vies with sugar as the leading export commodity from Guyana. The largest gold producer in the country is Omai Gold Mines Ltd. Once a joint venture by two Canadian firms (Cambior and Golden Star), since 2002 it is 95% owned by Cambior; the Government of Guyana owns the other 5% share. Other foreign-owned or funded ventures are also mining gold in Guyana.

Gold was traditionally mined mainly from alluvial and eluvial deposits. However, in recent years, Omai Gold Mines has been mining gold from a large open pit; this considerably increased the country's gold production. Omai produced 339,798 ounces of gold in 2002, but anticipates production of just 273,000 ounces in 2003 due to depletion of ore resources. Small-scale miners increased production to 117,240 ounces in 2002. Declared exports of gold fell slightly from 14,181 kg. in 2001 to 13,582 kg. 2002.[34]

The Guyana Gold Board holds the monopoly on the commercialization of gold in Guyana. The Board collects the royalty rate of between 3% and 5%. It is thought that significant amounts of gold production may evade regulation; the authorities indicate that perhaps one third to one half of production goes undeclared.

3 Diamonds

Diamond production has been traditionally important; however, the industry was in decline between the 1970s and the mid 1990s. Production has been steadily increasing in the past few years. Declared exports rose from 184,309 carats in 2001 to 248,437 carats in 2002.[35] Cumulated earnings from the export of diamonds reached US$43 million during 1998-02.[36] Guyana is a signatory to the Kimberley Protocol, designed to combat the problem of "conflict diamonds".

4 Petroleum

Guyana has laws to regulate the development of a petroleum-extraction industry. The Petroleum (Production) Act (1939) and the Petroleum (Exploration and Production) Act (1986) will govern any future exploitation of this resource (Cap. 65:05 and 65:10). These laws provide that oil may not be explored without a licence. Licences may not be granted to individuals unless they are citizens of Guyana, but may be granted to foreign or domestic corporations (Cap. 65:10, Article 9(1)). Decisions to grant licences for the production of petroleum take into account several factors, including the applicant's proposals for the employment and training of citizens of Guyana, and proposals with respect to the procurement of goods and services obtainable within Guyana (Cap. 65:10, Article 36(1)).

There has never been any commercial production of oil in Guyana, but it is a sector of long-standing and increasing interest for the country. Active exploration has been under way since 1917, and wells have been drilled onshore in the coastal zone, offshore, and in the Takutu Basin. The latter region is situated near the border with Brazil, and is the only area, thus far, in which petroleum has been found. The Guyana portion of the Takutu Basin is approximately 10,300 square kilometres. In 1979, Home Oil Canada drilled two wells. Over a dozen exploratory wells have been drilled in offshore Guyana since 1967. Although the last one was drilled in 1992, CGX Energy Inc. was granted a prospecting licence to drill offshore in the Corentyne area. Exploration for offshore oil in Guyana's Exclusive Economic Zone has been considered by international firms such as Esso, CGX Energy, Maxus Guyana Ltd., and Century (Guyana) Ltd.[37] The authorities remain optimistic in light of promising indications from explorations carried out to date.

Since there is currently no production, Guyana is entirely dependent on imports for its oil supply. The Petroleum Act (1930) regulates the establishment of procedures for the importation, unloading, and storage of petroleum products. Consumption taxes on imported oil account for nearly 10% of government revenue.

The Guyana Energy Agency (GEA) is the official agency dealing with energy issues in Guyana. The GEA's mission is to encourage the rational and efficient use of imported petroleum-based energy sources, while encouraging, where economically feasible and environmentally acceptable, increased utilization of indigenous and renewable sources of energy.

5 Silica sands

Silica sands cover about 5,000 square miles in north-eastern Guyana. The sands are a vast source of high-purity silica oxide. Guyana has sold silica sands to other countries in the Caribbean region since 1993. These sands are used both for the production of glass and to refurbish beaches.

6 Manufacturing

1 Features

Guyana's manufacturing sector remains small, and is devoted primarily to the processing of the country's major agricultural, mineral, and forestry products. The sector has declined in relative significance in the past few years, falling from 6.8% of GDP in 1997 to a budgeted 5.8% of GDP in 2003 (Table I.2).[38]

Some manufacturing activities have disappeared altogether in the last 30 years, while most others produced less in 2000 than in 1972 (Table IV.5). The composition of the Bank of Guyana index may no longer be an accurate representation of the manufacturing sector in Guyana, insofar as it does not cover some industries that are now active (e.g., furniture). It is nonetheless notable that overall production of the items that comprise the index fell in 2000 to just 62.9% of the levels achieved over a generation before. The more successful sectors in this index are classified by the WTO as agricultural rather than manufactured goods.

Table IV.5

Index of manufacturing output, 1990-00

(1972 = 100)

| |Unit |1990 |1995 |1997 |1998 |1999 |2000 |

|Beer & stout |litre |142.0 |125.3 |167.1 |169.9 |171.7 |156.7 |

|Margarine |kg. |38.4 |89.6 |128.0 |125.7 |139.2 |133.5 |

|Flour |tonne |97.7 |111.8 |102.9 |96.4 |107.0 |108.8 |

|Stockfeeds |kg. |36.7 |50.2 |81.7 |79.2 |96.3 |93.9 |

|Biscuits |kg. |48.3 |86.4 |62.4 |65.5 |69.0 |65.0 |

|Garments |dozen |14.2 |97.3 |80.9 |76.7 |67.5 |51.1 |

|Aerated beverages |litre |9.3 |24.7 |26.3 |26.1 |54.4 |49.6 |

|Rum |litre |92.6 |114.5 |118.3 |108.5 |72.1 |48.2 |

|Edible oil |kg. |0.04 |49.1 |24.1 |36.7 |44.6 |26.7 |

|Soap |tonne |23.8 |12.4 |12.8 |9.7 |14.2 |6.5 |

|Cigarettes |kg. |54.0 |69.6 |50.4 |0.0 |0.0 |0.0 |

|Matches |gross boxes |70.8 |16.8 |0.0 |0.0 |0.0 |0.0 |

|All manufacturing | |75.0 |97.0 |99.0 |89.9 |77.3 |62.9 |

Source: WTO calculations, from Bank of Guyana (2002), Annual Report and Financial Statement of Accounts 2001.

Guyana enjoys preferential access to the U.S., EU, and Canadian markets for its manufactured products, provided under the CBI, Cotonou, and CARIBCAN arrangements, respectively. Guyana is also the beneficiary of the GSP schemes of a number of other countries, and has duty-free or reduced-duty access to the markets of other CARICOM countries as well as Venezuela and Colombia. Despite this preferential access, the development and growth of the manufacturing sector has been limited. Apparel is the one notable area of growth in Guyana's exports of manufactures, benefiting notably from the "NAFTA parity" that the United States has extended to CBI beneficiary countries since enactment of the Trade and Development Act of 2000. Between 1990 and 2002, U.S. imports of apparel from Guyana increased from US$2.2 million (4.2% of U.S. imports from Guyana) to US$10.8 million (10.4%).[39]

Apart from apparel, much of Guyana's exports of manufactured products consist of goods that are elaborated from domestically produced raw materials. These include furniture and other wood products (from timber), rum (from sugar), and a variety of processed food products.[40] Guyana does not have the capacity to produce aluminium from bauxite, which would require a vastly greater volume of electrical energy than is presently available domestically. The country also produces footwear, chemicals, pharmaceuticals, building materials, jewellery, and other products, but production figures for most manufactured goods are generally not available.

Guyana's furniture industry is predominantly geared to serving the domestic market, although some firms are increasingly focusing on exports. Among the problems that have reportedly inhibited the development of an export-oriented furniture industry are the lack of finance, scarcity of skills, and restricted markets.[41] The metal-fabrication industry concentrates on servicing the local market. It produces castings and pumps, as well as spare parts, components, and other equipment used by the sugar, rice, and mining industries. Guyana Pharmaceutical Corporation is the leading producer in the country's small pharmaceutical industry, and is involved in the manufacture and dispensing of a number of drugs. The printing and publishing industries cater mainly to the local market.

Some enterprises in the manufacturing sector represent intra-CARICOM investments. Examples include glass bottles produced by ANSA McAl (Trinidad and Tobago), publishing by Caribbean Communications Network (Trinidad and Tobago), and paint manufactured by Harris Paints Ltd. (Barbados). Other enterprises in the manufacturing sector benefit from Chinese participation in the form of investments, joint ventures, or technical assistance. These include the Sanata Textiles Mill and the Golden Bridge bicycle assembly plant.[42]

2 Policy considerations

The Ministry of Tourism, Industry, and Commerce is responsible for formulating, implementing, and monitoring the policies for the manufacturing sector. The responsibility for investment promotion is vested in the Guyana Office for Investment Promotion (GO-INVEST). The Food and Drugs Department of the Ministry of Agriculture, the Guyana National Bureau of Standards, the Pesticide Control Board, and the Public Health Office of the Municipality are responsible for the setting, monitoring and enforcement of standards and quality, principally but not exclusively in the manufacturing sector.

The Consumer Affairs Division of the Ministry of Tourism, Industry, and Commerce is responsible for policy formulation with regard to consumer affairs. Consumer organizations that represent public interests in respect to manufactured products include the Guyana Consumers Association, the Consumers Advisory Bureau, and the Consumer Movement of Guyana. These organizations receive quarterly subventions from the Ministry, and statutory monthly meetings are held under the chairmanship of the Minister. Corporate interests are represented by the Chambers of Commerce in Demerara, Berbice, and Essequibo, the Guyana Manufacturers Association, and the Consultative Association of Guyanese Industry. In 1992, the Private Sector Commission was created as an umbrella institution. Some of these institutions are represented on the National Advisory Committee on External Negotiations.

The policy for the manufacturing sector follows CARICOM broad guidelines, which is to encourage those industries with a higher degree of value-added.

The Government employs industrial estates as a mechanism for the promotion of manufacturing and agri-processing in Guyana. Two estates are currently in operation, in Eccles and Coldingen near Georgetown in Region 4, and two more are being established in Lethem and New Amsterdam. The Eccles and Coldingen estates contain a range of industries: food processing, warehousing, engineering, chemicals, garments, furniture, electronics, pharmaceuticals, fish processing, and light manufacturing; warehousing, furniture, and electronics are the most prominent. The estates offer the users benefits of civil infrastructure works and utilities; 75% of the development costs of the sites themselves are absorbed by government. The National Industry and Commercial Investment Ltd. (NICIL) holds the title to all industrial estates in Guyana, and the sites are operated by the Ministry of Tourism, Industry, and Commerce, and estate Management Committees. Applicants for these estates must provide to the Ministry an implementation schedule for the investment and a floor plan for the structure. In reviewing applications the Ministry considers the nature and scope of the business, export potential, employment, level of investment, history of the applicant, and ability to finance. When agreement is reached, NICIL prepares a lease document for the investor. Initial leases were for 25 years, but the leasing structure has since been reviewed, and 99-year leases are now available for the Eccles site. The annual lease rate is G$1 per square foot; investors are responsible for reimbursing the Management Committee the costs of infrastructure maintenance. The Government is also considering the establishment of export processing zones to promote manufacturing and agri-processing.

The Guyana Manufacturers Association views the processes of globalization and regional liberalization with some alarm.[43] Citing the reduced prices that Guyana has received for its manufactures and the increased costs for power and other inputs, the group has advocated the negotiation of a safety net similar to the programme developed for the country's rice industry.

3 Market access

The simple average MFN tariff in 2003 for non-agricultural products (WTO definition) was 10.3%. The average tariff for manufacturing (ISIC definition) was 11.5%, while that for manufacturing, excluding food processing, was 9.8% (Table III.3). HS Chapters 25-97 were subject to an average tariff of 9.7%. Some HS sections facing above-average tariffs included: textiles and apparel (11.4%); footwear, headgear (16%); precious stones (30.3%); transport equipment (12.2%); precision equipment (13.9%); arms and ammunition (42.5%); and miscellaneous manufacturing products (15.3%). As mentioned in Chapter III.1, tariff escalation is present in some industries, such as textiles and clothing, chemicals, wood products, paper, non-metallic minerals, and fabricated metal products. Guyana has a general ceiling binding of 50% for manufactures (with some exceptions). Guyana also bound other duties and charges applied on imports at 30% for non-agricultural products, with the exception of certain petroleum products, bound at 50%. Most items are subject to consumption tax at a rate of 30% (Chapter III(2)(iii)).

Under CARICOM rules, Guyana grants full tariff exemptions to 78 products included in the List of Conditional Duty Exemptions to the CET (not classified by HS heading), for approved industry and agricultural purposes. A number of products used in manufacturing have partial exemptions from import duties, such as protective clothing and equipment imported by industrial concerns, and uninsulated wire cables and ropes of iron and steel for industrial use. In general terms, the manufacturing sector may enjoy a number of incentives, including duty and consumption tax at a rate of zero on a wide range of machinery and equipment; exemption on auxiliary plant equipment such as boilers and fork lifts; exemption from duty and consumption tax on vehicles imported exclusively for the business; exemption from import duty and consumption tax on packaging materials for manufacturers registered under the Consumption Tax Act; duty and consumption tax rate of zero on most raw materials for companies registered under the Consumption Tax Act; and waiver of 30% consumption tax on power generators (Chapter III(4)(ii)). Also, the In-Aid-of-Industry Act provides for accelerated depreciation on capital expenditures, and the Industries Aid and Encouragement Act allows duty-free importation for five years of prescribed items for the purpose of establishing a new industry or developing an existing one.

7 Electricity and Other Utilities

The electricity sector in Guyana is small and at an early stage of development. Activity in this field is regulated under the Electricity Sector Reform Act (1999) (ESRA), the Guyana Energy Agency Act 1997, the Hydroelectric Power Act (Cap. 56:03), and the Energy Sector (Harmonisation of Laws) Act 2002. ESRA 1999 repealed ESRA 1997, the Electricity Act and Electric Lighting Act (Cap. 56:01 and Cap. 56:02) respectively. The Prime Minister is vested with responsibility for the energy and electricity sector, including the formulation, implementation, and supervision of policies for the sector; the Prime Minister is also responsible for Guyana Power & Light. The Public Utilities Commission is the industry's regulator. Guyana has made no GATS commitments in energy distribution services.

Total demand for electricity in Guyana is about 175 MW. The principal public supplier, Guyana Power & Light, Inc. (GP&L), currently meets about 80 MW of this need; the forestry, mining, sugar, and other manufacturing entities account for the balance. The demand on the national grid is projected to increase to about 90 MW by 2005 and to 120.2 MW by 2010. Electricity generated by GP&L totalled 477 GWh in 2000, 505 GWh in 2001, and 513 GWh in 2002.

The Guyana Electricity Corporation was privatized in 1999 and the Guyana Power and Light, Inc. (GP&L) was established as the principal public supplier. The mission statement of the company is to provide an expanding customer base with electricity services that are technically, financially, and environmentally sustainable, achieving best practice and acceptance norms.[44] From 1999 to 2003, Americas & Caribbean Power (AC Power) held half of the company and exercised management control. AC Power's shares were held 80% by CDC Capital Partners (United Kingdom) and 20% by ESB International (Ireland). The Government of Guyana held the other half-share. Although the country's electricity generation increased by 31.3% between 1997 and 2002 (Table I.3), there were significant problems in the management and regulation of the company. The private investors sold their full share in the company back to the Government in early 2003 for US$1, and the Government resumed full ownership of the utility as of 8 April 2003 and management control as of 1 May 2003.

The main policy goal in the energy sector is to secure an adequate and dependable supply of electricity. This requires improving the quantity, to meet increases in demand, quality and reliability of electricity supply, and reducing system losses. Guyana's energy policy is also aimed at reducing dependency on imported petroleum products, and at increasing the use of new and renewable domestic energy resources where commercially feasible. The National Development Strategy seeks to encourage, through fiscal incentives, investment in the energy sector, particularly in locations away from the coast, to enhance energy-generating capacity.

Government policy in the electricity sector aims to promote the use of renewable fuels. As part of the privatization arrangement in 1999, GP&L was granted tax and customs duty exemption on fuels. Beginning in October 2004, GP&L will be required to pay related customs duties of 10% on fuel. This amounts to an oil tax, insofar as GP&L does not use gas or coal or any other form of renewable source to generate electricity. In early 2003, the Government declared that it would review its energy policy to emphasize conservation and the development of alternative sources of power, including hydro, solar, and bagasse, over the medium-to long-term.[45]

The Electricity Sector Reform Act (ESRA) provides for self-generation at all levels; domestic, commercial, and industrial. In addition, generation is opened to competition through power purchase arrangements open to the private sector, including foreign producers, subject to these independent power producers obtaining a licence. Licence periods are determined in each licence. Licences issued under ESRA could be for up to 25 years and may be renewed for a period up to 15 years, while licences for the generation of hydroelectric power could be granted for a period up to 50 years and renewed for another 50 years. Through its licence, GP&L has been granted exclusivity in transmission and distribution of electricity in Guyana for 25 years (until 2022) with the exclusion of certain areas. Other providers are permitted to offer transmission and distribution services in any areas of the country where the company does not wish to go.

The responsible Minister (currently the Prime Minister) must approve any extension and construction of new facilities for the generation of electricity. Licensed suppliers may be required to implement rural electrification programmes. Suppliers must be companies established under the Companies Act.

The ESRA established that tariffs will be basic energy rates that include allowed expenses and a certain allowed margin of return. In addition, basic rates in any year could be adjusted to reflect an increase or decrease in fuel costs or a change in the exchange rate of the Guyana dollar. The rate-setting procedures are further elaborated in a formula detailed in Schedule 1 of the 1 October 1999 Licence to Supply Electricity for Public Purposes Granted to Guyana Power and Light, Inc. That formula is based on a target rate of return, and takes into account such factors as the cost of fuel and other charges, the exchange rate of the Guyana dollar, amortization of GP&L debt, etc. ESRA sets the rates that were in effect from the date of the agreement through 1 January 2001, and establishes the procedure by which rates are determined in the subsequent period. The licence also provides for such matters as an obligation on GP&L to enter into power-purchase agreements with independent power producers of alternative sources of energy, such as GUYSUCO and Amaila Falls developers, provided that such proposals are commercially feasible.

The principal primary sources of energy in Guyana are petroleum products (which are all imported), bagasse, and fuelwood. In 1999, they accounted for 67%, 26%, and 7% respectively, of the energy produced.[46] In 1999, electricity generation, industry, and mining used 90% of the primary energy supplied. Mining and timber enterprises in the country's interior are generally outside of the national electrical grid, and hence must generate their own electricity. These include the Linden Power Company, a private company in Linden that produces about 12 MW from petroleum fuel. There are provisions for GP&L to take over Linden Power Company. In the Lethem area, electricity is provided by a Chinese-supported Government project known as Moco-Moco, through a 0.5 MW hydroelectric plant. Bagasse is used for the co-generation of steam and electricity in the sugar industry. Rice husk is also used by two rice millers for steam and electricity generation.

Guyana has not yet developed its potentially significant hydropower potential. It is estimated that the economic potential of hydropower is 7,000MW. The Guyana Natural Resources Agency (GNRA) has conducted preliminary study of six sites for the development of medium and large-scale hydroelectric facilities.[47] Developers have shown strong interest in developing the Amaila Falls Hydroelectric Project (AFHEP) with an installed initial generating capacity of 105 MW (Phase I), larger than current domestic demand, to be expanded to 165 MW (Phase II). The feasibility study for the project has been substantially completed and the developers are working on financing arrangements. Phase I is scheduled to be implemented by December 2004. The project is the largest ever in Guyana, with Phase 1 costing US$315 million, including the construction of the 105 MW power plant at Amaila, 145 miles of transmission lines, and 35 miles of roads. An additional cost of US$50 million is estimated to build Phase II. The project is being developed as a private-sector venture, without any public funding, and is financed by a consortium of foreign banks and investment companies.

In the 1980s, Guyana considered purchasing power from Venezuela but this prospect is no longer being pursued. Prospective developers of a hydroelectric plant at Turtruba in Guyana are exploring the possibility of exporting power to Brazil.

Linden Mining Enterprises provides potable water in Linden. In most of the rest of the country, the provider is Guyana Water, Inc. (GWI). This is a Government-owned, private-managed firm formed in early 2003 by the merger of the Georgetown Sewerage and Water Company and the Guyana Water Authority. The Government signed a five-year contract under which a firm based in the United Kingdom will manage the GWI. GWI's approval is required before a private enterprise drills a well for water.

The NDS proposed the creation of a National Water Commission (NWC) to oversee and coordinate the activities of all water-related agencies. Representatives of the main water-users were expected be on the Commission, which would also be authorized to formulate the mechanisms for the implementation of this National Water Strategy.

8 Services

1 Features

Services (not including engineering and construction) account for some 40.2% of Guyana's GDP in 2003 (Table I.2). The main subsectors identified in the national economic statistics are Government, followed by transport and communications, distribution, and financial services; the tourism sector is not separately identified. Guyana traditionally posts a deficit in trade in non-factor services. This deficit was US$23.5 million in 2002.

Several services sectors have formal associations in Guyana to promote their interests. These include engineering, banking, legal, construction, information technology, domestic air transportation, travel agency, and real estate sectors. MOFTIC has sought to advance services trade by promoting the creation of a new National Coalition of Service Providers. This umbrella organization of private-sector representatives is intended to identify and represent the interests of all users and exporters of services. At present it is working to identify all aspects of Guyana's laws affecting services sectors that may need to be updated in light of the country's international commitments.

2 Commitments under international agreements

1 WTO commitments

Guyana has made GATS commitments in five sectors (business, communication, financial, tourism, and transport services) (Table IV.6). In its horizontal commitments, Guyana left the movement of natural persons (mode 4) unbound except for market access with respect to measures relating to senior management personnel and technical experts not available in the local labour market, and for national treatment to those categories of natural persons. No list of MFN exemptions was presented. Guyana did not present offers in the WTO negotiations on telecommunications and financial services.

2 Commitments under regional agreements

Mode 4 issues are important at the regional level. Within the CARICOM countries, restrictions on the extension of work permits remain a significant barrier to trade in services. Guyana has made significant progress in removing these restrictions as provided under the Caribbean Community (Free Entry of Skilled Persons) Act of 1996 (Cap. 93:02). While foreign nationals who seek to work in Guyana generally must obtain a work permit from the Ministry of Home Affairs, CARICOM nationals who are graduates of either the University of the West Indies or the University of Guyana are exempt from this requirement.

3 Financial services

Financial services accounted for 3.6% of GDP in 2001. As of June 2003, the financial sector comprised six commercial banks, as well as insurance companies, a building society, trust companies, finance companies, pension schemes, credit unions, bank and non-bank cambios, and private sector organisations (PSOs) financing small and micro enterprises. A stock exchange was established on 30 June 2003, under the supervision of the Guyana Securities Council.

(a) Banking services

There are six commercial banks currently operating in Guyana. Banks were among the industries targeted for nationalization in the 1980s and the Government became the primary lender. Nationalized banks included the Royal Bank of Canada, Chase Manhattan, and Barclays Bank. Following privatization, the largest banks in the country are the National Bank of Industry and Commerce (much of which is owned by the Republic Bank of Trinidad and Tobago) and the Guyana Bank for Trade and Industry. Other banks with substantial foreign ownership include the Bank of Baroda (India), the Citizens Bank (Guyana) Ltd. (Jamaica), and the Bank of Nova Scotia (Canada). The Demerara Bank is partly U.S.-owned. All the banks offer a full range of banking services. The banking business of the Guyana National Co-operative Bank, which was one of the largest three banks in Guyana, was sold to the National Bank of Industry and Commerce Limited in early 2003, and the banking licence issued to the former was revoked with effect from 15 March 2003. This public sale was done to end government participation in the financial sector. Commercial banks now make up over 70% of the assets of the financial system.[48]

Table IV.6

Summary of Guyana's specific commitments in individual service sectors

| | | |Market access |National treatment |

| |Mode of supply: | | | | | | | |

| | Cross border |1 | | |1 | | |

| | Consumption abroad | |2 | | |2 | |

| | Commercial presence | | |3 | | |3 |

|Commitments (■ full; ◨ partial; □ none; − not in the Schedule) |

|Sector-specific Commitments | | | | | | |

|1. Business services | | | | | | |

| A. Professional services | | | | | | |

| a. Legal services |■ |■ |■ |■ |■ |■ |

| b. Accounting, auditing, and book-keeping services |■ |■ |■ |■ |■ |■ |

|d, e. Engineering and architectural services |■ |■ |■ |■ |■ |■ |

| h. Medical and dental services |■ |■ |■ |■ |■ |■ |

|2. Communications services | | | | | | |

| Value-added services | | | | | | |

| j. On-line information and data base retrieval |■ |■ |◨ |■ |■ |■ |

|7. Financial services | | | | | | |

| B. Banking and other financial services (excl. insurance) | | | | | | |

| a. Acceptance of deposits and other repayable funds from the public |■ |■ |■ |■ |■ |■ |

| b. Lending of all types, incl. inter alia consumer credit, mortgage |■ |■ |■ |■ |■ |◨ |

|credit, factoring and financing of commercial transactions | | | | | | |

| A. Insurance services | | | | | | |

| I. Direct insurance | | | | | | |

| a. Life, accident, and health insurance services |■ |■ |■ |■ |■ |■ |

| b. Non-life insurance services |■ |■ |■ |■ |■ |■ |

| d. Services auxiliary to insurance (including broking and agency |■ |■ |■ |■ |■ |■ |

|services) | | | | | | |

|9. Tourism and travel related services | | | | | | |

| A. Hotels and restaurants |□ |■ |■ |□ |■ |■ |

| B. Travel agencies and tour operators services |■ |■ |■ |■ |■ |■ |

|11. Transport services | | | | | | |

| C. Air transport services | | | | | | |

| a. Aircraft repair and maintenance services |■ |■ |□ |■ |■ |□ |

| c. Computer reservation system |■ |■ |■ |■ |■ |■ |

| F. Road transport services | | | | | | |

| a. Passenger transportation |■ |■ |■ |■ |■ |■ |

| b. Freight transportation |■ |■ |■ |■ |■ |■ |

| e. Supporting services for road transport services |■ |■ |■ |■ |■ |■ |

Source: WTO document GATS/SC/37, 15 April 1994; and WTO Services Database.

At year-end 2002, the commercial banks of Guyana had assets of G$134.9 billion (about US$703.6 million). Of this, 8% represented balances due from foreign banks, loans to non-residents, or other foreign assets. The banks' liabilities also totalled G$134.9 billion, of which 3.9% consisted of balances due to banks abroad or deposits by non-residents. Of the total liabilities, 16.5% consisted of capital and reserves. Only 3.1% of total loans were to non-residents.[49]

The Bank of Guyana has statutory responsibility for authorizing and supervising all licensed financial institutions in Guyana. One of the Bank's objectives is to foster sound financial intermediation. The Bank of Guyana exercises its supervisory functions under the Bank of Guyana Act 1998 and the Financial Institutions Act 1995.

The Financial Institutions Act (1995) requires that an institution obtain a license from the Bank of Guyana (Cap. 85:01) to operate in Guyana as a "licensed financial institution" (LFI). The application fee of G$25,000 must be accompanied by information specified in the law regarding the applicant (name, address, nationality, etc.), the proposed activity, the articles of incorporation, and so forth. The law requires a minimum paid-up capital of G$250 million; foreign companies that are not incorporated in Guyana and that seek a licence to conduct deposit-taking financial activities must have the overall capital equivalent of at least G$2.5 billion. The law, together with the Bank of Guyana's regulations, form the Supervisory Guidelines for financial institutions. They provide for such matters as capital adequacy ratios, the categorizing of loan performance, etc. This 1995 statute supplemented and modified the Banking Laws Act of 1991 (Cap 85:07). The Off-Shore Banking Act (Cap. 85:05) was enacted in 1986, but reportedly has not been applied.

The Financial Institutions Act distinguishes between companies that conduct "banking business" and those that conduct "financial business." The former category of business is licensed to accept demand deposits that are repayable in less than 30 days, while the latter may not. A licensed financial institution that is permitted to conduct banking business may also be licensed to engage in financial business, but the reverse is not normally allowed.

A bank or other LFI in Guyana cannot grant secure loans, advances, financial guarantees, or other extensions of credit and other liabilities in excess of 25% of its capital base, with respect to an individual, or 40% for borrower groups with inter-dependent incomes. No shareholder is permitted to hold more than 25% of the shares of any LFI unless authorized by the Bank of Guyana; the shareholder must be a person "fit and proper" to conduct financial business within Guyana.

Guyana has made GATS commitments on services for (a) the acceptance of deposits and other repayable funds from the public and (b) lending of all types, including inter alia consumer credit, mortgage credit, factoring, and financing of commercial transactions. In both of these subsectors, Guyana made full commitments in modes 1 and 2. The only limitation in mode 3 concerns national treatment commitments for "lending of all types," where Guyana stipulated that "loans to non-residents need to be approved by the Central Bank of Guyana." In mode 4, Guyana made no commitments "except as indicated in the horizontal section."

2 Merchant banking

The Guyana Bank for Trade & Industry (GBTI) has obtained a merchant banking licence in Guyana. Among the bank's functions is to provide advice to corporations. Other services identified include private and public sector advisory services, trade and equity financing, leasing, factoring, mergers, and acquisitions. This bank has substantial foreign ownership; it is a U.S.-Guyanese joint venture.

3 Foreign exchange services

The Dealers in Foreign Currency (Licensing) Act provides for the licensing of dealers in this business (Cap. 87:01). The Bank of Guyana is the regulatory agency. Decisions on the granting of these licences are to be based upon the applicant's experience in dealing with foreign currency, financial resources, and character. Among the grounds on which a licence may be denied is the determination that "an adequate number of persons have already been granted licences" in the area where the applicant proposes to carry on the business. About two dozen banks and other firms are currently licensed to deal in foreign currency. In 2001, the volume of foreign currency transactions in Guyana was US$1.8 billion, 96.3% of which was handled by commercial banks. The U.S. dollar accounted for 94.2% of the transactions; the rest were in British pounds, Canadian dollars, or CARICOM currencies.[50]

The Foreign Exchange (Miscellaneous Provisions) Act of 1996 prohibits the borrowing of gold or foreign currency from anyone other than an authorized dealer (Cap. 86:01). The law generally requires approval from the Minister of Finance before local businesses may borrow in foreign currency, foreign-based companies and their subsidiaries may borrow in Guyana, or residents may operate foreign currency accounts. The law also requires that any travellers entering or leaving Guyana with more than US$10,000 or its equivalent in any currency make a declaration to the Comptroller of Customs. The Bank of Guyana has guidelines regarding permission for exporters to maintain and operate foreign currency accounts, and commercial banks are allowed to open such accounts for non-residents without the prior approval of the Bank.

Guyana has made no GATS commitments in foreign exchange services.

4 Non-bank financial institutions (NBFIs)

NBFIs comprise pension schemes, trust companies, a building society, finance companies, and insurance companies. They accounted for about 30% of the total assets of the financial system in 2002.

The only building society currently operating in Guyana is the New Building Society (NBS); its major activity is mortgage financing for residential properties. Traditionally its mortgage rates are lower than those of other institutions in the financial system. Apart from mortgages, most of the New Building Society's investments have been in treasury bills and government debentures. The NBS accounts for about a third of the share in the total assets of NBFIs.

There are three trust companies operating in Guyana: GNCB Trust Corporation Inc., Trust Company Guyana Ltd., and Globe Trust and Investment Ltd., engaging mainly in the provision of mortgages and some types of loans and advances. They accounted for some 11.5% of NBFIs assets in 2001.

Finance companies also provide loans and mortgages, but may not accept demand deposits that are repayable in less than 30 days. There are three institutions classified by the Bank of Guyana as finance companies: one stock broker (Beharry Stock Brokers, Ltd.), one finance company (Laparkan Financial Services, Ltd.), and one investment company (Secure International Finance Company Inc.). These three companies are minor players in the financial market, accounting for just 1.8% of total NBFI assets.

Pension schemes accounted for some 20% of NBFI assets in 2001. Pension plans are subject to a registration process and must be approved by the Commissioner of Insurance, in accordance with the requirements established by the Insurance Act of 1998 (Cap. 91:02). Among the requirements is that 70% to 80% of the assets must be invested in Guyana.

5 Private sector organizations (PSOs) and other providers of financial services

There are six PSOs offering financial assistance to small and micro enterprises: the Institute of Private Enterprise Development (IPED); the Scotia Enterprise (affiliated to Bank of Nova Scotia); the Small Business Development Initiative; the Women's Affairs Bureau; the Red Thread; and the Commonwealth Youth Credit Initiative.

PSOs provide financial services that banks usually do not make available. For example, they offer credit with little or no collateral; they link savings with credit provisions; and provide credit to groups. Additionally, they offer technical expertise such as counselling, training in basic education, and entrepreneurship. These agencies also tend to have an interest in small and micro financing by foreign financial institutions.

Credit union funds are supplied through members' deposits and "shares" purchasing. Credit unions have a large membership, but play a small role in the financial system largely because lending limits are too restrictive, and deposit rates are very low. In 2001, they accounted for only 0.1% of the assets of the financial system.

Precise data on the amount of transactions in informal financial markets are not available, and opinions differ on its magnitude.

6 Insurance services

The Insurance Act No. 20 of 1998 (Cap. 91:02B), provides for the regulation of this industry replacing the Insurance Act (1970). The authorities note that as of mid 2003 the regulatory environment for the sector is still in a process of development.

The law requires insurance companies, brokers, and agents to be registered with the Commissioner of Insurance, who supervises the industry and reports to the Minister of Finance. The law authorizes the Commissioner to delegate some supervision of intermediaries to the Insurance Association of Guyana. Only companies or associations of underwriters may carry on insurance business in Guyana. Also, only companies or partnerships can act as brokers; these companies may not carry out any other type of insurance business.

Fifteen local companies have applied to offer life and/or general insurance, as well as two foreign companies, from Barbados and the United Kingdom. The assets of insurance companies were G$13.6 billion (some US$72.6 million) in 2001; this represented 24.8% of total NBFI assets. The life segment of the insurance business accounted for 74.8% of the industry's resources. Life insurance premiums were G$7.2 billion (US$38 million) in 2001, of which the non-resident component was 57.4%. Insurance companies' holdings of foreign assets totalled G$6.8 billion (US$36.5 million), and comprised mainly deposits and foreign securities.

Registration is contingent upon criteria established in the law. Any company may make an application for registration, including foreign companies. Companies applying for registration must make a deposit of G$5 million per class of business (the figure is adjusted for inflation since 2001). In the case of general insurance, the deposit must be equal to 20% of the net premium income of the insurer in that class of insurance (with deductions for re-insurance), or G$5 million per class, whichever amount is larger.

Insurance companies are not precluded from engaging in other financial activities, except as specified in the Financial Institutions Act, but are required by law to keep separate accounts, even for the different classes of insurance activities in which they engage. Insurers must conduct an actuarial investigation of their financial situation every three years and submit the results to the Commissioner of Insurance.

A number of investment requirements apply. Companies are required to establish a statutory fund equal to their liabilities and contingency reserves, in respect of the policies subscribed in Guyana, deducting the deposit paid for registration. Companies carrying out business other than long-term insurance must keep the statutory fund separate from other activities. Insurers are required to invest in Guyana and maintain assets there equivalent to 75-85% of their statutory fund. However, for each percentage point of the fund invested in stock or debt of Guyanese companies, a percentage point may be deducted from the 75-85% up to ten percentage points. To comply with the asset requirement, the law specifies that an insurance company carrying on long-term insurance business may invest each year in assets in Guyana an amount not less than 80% of its premium income in that year in respect of long-term insurance policies issued in Guyana, before making deduction of fees and other expenses. Every insurance company carrying on long-term insurance business in Guyana must invest each year in securities approved by the Commissioner an amount equal to 20% of the increase in that year of its statutory fund.

The Commissioner of Insurance submits to the Minister of Finance an annual report on the situation of the insurance companies. The Commissioner may prohibit a registered company from writing new policies in any class of insurance business if he is satisfied that it is in the interest of the policy-holders or prospective policy-holders to do so. The company must be previously notified and may appeal the decision. Disputes and complaints are handled by the Insurance Arbitration Board, which comprises a representative from the Commissioner's office, a representative of the Insurance Association of Guyana, and a representative of the insurance brokers. Decisions of the Board may be appealed in court, up to the High Court.

Guyana made GATS commitments in three insurance subsectors: life, accident, and health insurance; non-life insurance; and services auxiliary to insurance (including broking and agency services). The commitments were identical in the three subsectors: they have no limitations for modes 1, 2, and 3, while for mode 4 Guyana has made no commitments "except as indicated in [the] horizontal section."

7 Securities and other financial services

The Securities Industry Act (1998) regulates the activities of the securities market (Cap. 73:04). The Act mandates the creation of a Securities Council, which led to the establishment of a Securities Commission; a Chief Executive Officer to the Commission was appointed in early 2003. The law defines the membership and powers of the Council, provides for self-regulatory organizations, and sets rules for the registration of market participants, the conduct of market operations, and enforcement provisions. With effect from 30 June 2003, the Guyana Association of Securities Companies and Intermediaries (GASCI) was registered by the Guyana Securities Council as a self-regulatory organization to function in the capacity of a stock exchange and an association of securities companies and intermediaries. GASCI opened its doors for trading on 30 June 2003, with the first trade being made on the exchange on 8 July 2003.

Guyana has made no GATS commitments in securities and other financial services.

4 Tourism

1 Market developments

The tourism industry in Guyana has not yet been highly developed, and contributes much less to the national economy than the sector does in many other Caribbean countries. As of 2002, Guyana recorded 104,300 visitors, a notable increase over the 65,600 in 1998 (Table I.3). Detailed data on the value of tourism for Guyana are not available. Exit surveys of visitors were suspended in 1999 in order to divert resources to the conduct of the national census. These surveys recommenced in May 2003; the current process of company registration with the new Tourism Authority will provide further data on the composition and size of this sector. The lower reliance on tourism has meant that Guyana's economy was hurt less by the recent decline in leisure travel than were other Caribbean destinations.

The tourism industry of Guyana hopes to capitalize on the fact that it is the only English-speaking country on the South American continent. Unlike many other destinations in the Caribbean, Guyana does not have expansive stretches of sandy beach or ports that are suitable for frequent landings by large cruise ships. It must therefore rely upon tourists who arrive by air to see attractions in the interior of the country, either natural (for example, Kaieteur Falls and the associated national park) or man-made (for example, the historical architecture of Georgetown). Among the niches in which Guyana hopes to compete are the related fields of nature and adventure tourism, eco-tourism, and cultural and heritage tourism, as well as the usual array of business meetings and entertainment.

The industry has been the subject of several recent studies and development projects, including the release of a policy framework in 2001. This plan highlighted the country's advantages, but also observed that the single most important constraint to tourism growth has been that tourism has not been recognized as a priority economic sector for the country.[51] Since 2000, the annual budget speech has identified this as a priority sector for the country.

2 Regulations and WTO commitments

The Guyana Tourism Authority Act of 2002 (Cap. 91:12) regulates activities in the sector. The Act established a Tourism Authority, a semi-autonomous agency linked to the Ministry of Tourism, Industry, and Commerce. Under the law, tourism operations must be licensed by the Tourism Authority. The Tourism Authority is also charged with developing and enforcing standards for the industry. The law does not appear to draw any distinctions between citizens and foreigners in the issuance of licences, nor does it explicitly provide for the conditioning of licenses upon factors such as the employment of Guyanese.

In the 2002 Budget Speech the Government announced plans to enhance the contribution of the tourism sector through, inter alia, the abolition of the 10% room tax for tourism facilities that are deemed to be resorts.[52] The Government of Guyana is encouraging an increase in the number of hotel rooms and improvement in existing plant and other facilities in the tourism sector. To facilitate this growth, the government has made available a package of incentives. This comprises mainly duty-free and consumption tax concessions for basic furnishings, plant, equipment, and building materials. In order to qualify for duty and consumption tax exemption an applicant must provide, inter alia, a project profile or business plan and an environmental impact assessment. Duty-free concessions will be limited to 25% of the value of the investment for refurbishing, and 50% of the value of investment for new facilities or expansion.

Guyana made GATS commitments in two subsectors related to tourism. For hotels and restaurants modes 2 and 3 are bound with no restrictions, but mode 1 is unbound due to the lack of technical feasibility, and mode 4 is unbound except as indicated in the horizontal section. For travel agencies and tour operator services, Guyana bound both market access and national treatment in modes 1, 2, and 3, leaving mode 4 unbound.

5 Transport services

1 Maritime and other water transport services

The Minister of Transport and Hydraulics, in the Ministry of Public Works and Communications, is responsible for maritime transport policy. The Maritime Administration Department is responsible for safety in coastal waters and is also the exclusive provider of pilotage services. The Department also regulates non-maritime water transportation service, which are of particular importance for Guyana. The Ports and Harbours Department is responsible for harbours and ports, and operates river ferries, and a network of stellings (ferry landings) and wharves.

The Guyana Shipping Act (1998) establishes the legal framework for maritime services in Guyana (Cap. 49:01). Among the many topics dealt with in this statute are the registration and licensing of ships, flagging, the manning of ships, the welfare of seamen, navigation and safety, regulation of cargo, wrecks and salvage, and legal proceedings. Under Section 10 of the Act only Guyana ships may trade exclusively between Guyana ports; this rule, however, is subject to regulations, exemptions, or "any bilateral or multilateral treaty or agreement."

The registration of ships in Guyana is, in principle, limited to nationals of Guyana or of other CARICOM countries, or to corporate bodies established in Guyana and having their principal place of business in the country. The Government of Guyana continues to own the National Shipping Company, and there are currently no plans to privatize this enterprise.

The flagging of vessels affects the fees and taxes to which they are subject. On the one hand, foreign-flag vessels have preferential access to fuel: they may purchase fuel duty-free, while the fuel purchased by Guyana-flagged vessels will include the consumption tax on fuel. On the other hand, foreign-flag vessels are subject to port fees, most of which are not applied to Guyana-flag vessels.

Guyana has made no GATS commitments on maritime transport services. Guyana participates in a relatively large number of maritime conferences administered by the International Maritime Organization.[53] There is also a Caribbean Memorandum of Understanding on Port State Control, which came into being in 1996, dealing with the inspection of ships to ensure their compliance with international safety standards.

The two main ports are in Georgetown and New Amsterdam; much of the shipping in Guyana is on the major rivers that fragment the country. Guyana's shipping costs are relatively high. This is a particular problem for the bauxite industry. The heavy deposits of silt in the Demerara River create narrow channels, necessitating the use of smaller, less efficient ore carriers.[54] Shortages of suitable barges create another bottleneck. These factors contribute to the high cost of shipping bauxite from Guyana to the United States, of US$10.12 per tonne compared with US$2.52 per tonne from Jamaica. The average cost of shipping this product to the U.S. market from all sources is US$6.49 per tonne.[55]

Although the management of ports is in the hands of the State, operational services (except for pilotage) may be provided by private companies. Several such companies are currently operational, most of them are foreign.

2 Air transport services

The Minister of Transport and Hydraulics, in the Ministry of Public Works and Communications, is responsible for civil aviation policy. The Civil Aviation Act (2000) regulates this sector (Cap. 53:01). The Act created the Civil Aviation Authority, which is responsible for advising the minister and providing air navigation, air-traffic, and safety services, including the registration of aircraft, and for the supervision of all aerodromes. The Authority also sets the fees and charges of airports and other segments of the industry, which are subject to approval by the minister. The Authority is responsible for air transport-related competition policy.

The Government has set up an air-transport reform programme, partly funded by a loan from the Inter-American Development Bank, to provide assistance for reform of the entire aviation sector.

Guyana is among the 188 contracting states of the International Civil Aviation Organization (ICAO). Guyana and the other South American ICAO members are aiming to put in place, by 2007, a new system of communication, navigation, surveillance, and air traffic management. Guyana is a party to the Multilateral Air Transport Agreement of CARICOM. Discussions are currently being held with the Association of Caribbean States for another air transport agreement for the free movement of airlines.

The two major airfields in Guyana are the Cheddi Jagan International Airport at Timehri (40 kilometres outside Georgetown) and the Ogle Municipal Aerodrome on the East Coast of Demerara (8 kilometres outside Georgetown). The Cheddi Jagan International Airport is administered by the Cheddi Jagan International Airport Corporation, created by Order No. 20 of 2001 under the Public Corporation Act. Under the Air Transport Reform Project, G$798 million has been allocated in the 2003 budget to commence work to improve the condition of the Cheddi Jagan International Airport. The Ogle airport is used primarily for domestic flights. The Government has privatized the Ogle airport through a lease agreement to Ogle Airport Incorporated. This entity is owned by a consortium of the businesses that operate out of the airport. The businesses are negotiating with the Government for various forms of tax holiday or other support. It is the intention of the Government to make Ogle a hub for regional connections, taking advantage of Guyana's status as host country for the CARICOM headquarters. Another G$62 million is scheduled to be spent on improving coastal and hinterland airstrips, of which there are more than 100.

Most international air service to Guyana is operated by carriers that are either national or regional (e.g. BWIA International Airways and Suriname Airways). Universal Airlines is a quasi-national carrier, insofar as its principal place of business is Guyana and its principal ownership is Guyanese-American. Universal has applied for service to Brazil, and flies to North America. North American Airlines is U.S.-owned and based and has weekly service to Guyana. None of the larger North American or European carriers have regular service to Guyana. About half a dozen local commercial operators service the hinterland, and GUYSUCO has a small fleet of its own. The Guyana Airways Corporation once offered both international and domestic service, but it failed in 1997 following privatization. Many travellers to and from Guyana, whether from neighbouring or distant countries, must make connections through regional hubs such as Barbados or Trinidad. While a round-trip, economy-class ticket to Georgetown from North America on a small carrier that flies directly may cost around US$500, a flight that involves connections with one of the larger international carriers will typically cost more than US$1,000. Flights within the country are also relatively expensive: a round-trip ticket between Georgetown and Lethem costs about US$150. It has been noted that these expenses constitute an impediment to the development of the tourism sector, increase costs for businesses such as mining, and hinder agricultural activities.[56]

Guyana made GATS commitments in two subsectors related to air transport services. For aircraft repair and maintenance services, Guyana bound, without limitations, market access and national treatment for modes 1 and 2, but left modes 3 and 4 unbound. For computer reservation system services, Guyana made full commitments in modes 1, 2, and 3.

3 Ground transport services

Guyana has some 2,347 kilometres of road networks.[57] Ground transportation is expected to become a more significant contributor to the national economy as a result of the construction of a road linking Guyana with the Brazilian state of Roraima. It is anticipated that the new link will expand trade and other exchanges between Guyana and the largest economy in South America. Guyana has a road link to Suriname with a ferry across the Corentyne River.

Guyana made GATS commitments in three subsectors related to ground transport services: passenger transportation, freight transportation, and supporting services for road transport services. The commitments were identical in the three subsectors. They are bound with no limitations for modes 1, 2, and 3, while mode 4 Guyana is unbound, except as indicated in the horizontal section.

6 Telecommunications

1 Features

In June 1990, the Government privatized the state-owned Guyana Telecommunications Corporation. Pursuant to that privatization, a new company called Guyana Telephone and Telegraph Co. Ltd. (GT&T) was formed. GT&T is still 80% owned by Atlantic Tele-Network Inc. (ATN) and 20% owned by the Government of Guyana. By its operating licence issued on 19 December 1990 under the Telecommunications Act, 1990 (No. 27 of 1990), GT&T was granted an exclusive licence with respect to the provision of public telephone and national and international voice and data transmission services for a period of 20 years from the date of grant of its licence, with an option to renew this licence on an exclusive basis for a further period of 20 years.

With assistance from the Inter-American Development Bank (IADB), the Government has embarked on a Modernization of the Telecommunications Sector Project aimed at establishing a competitive telecommunications sector. In the view of the authorities, this requires an early end to the GT&T monopoly. To pursue this objective, negotiations between the Government and ATN/GT&T commenced in February 2002 but were stalled in June of that year due to a lawsuit instituted by ATN against Guyana, the IADB, and the United States Government in Federal District Court of Washington, D.C. This lawsuit challenged the Government's decision to pursue another IADB loan for development of the information and communications technology sector and was grounded in some of the issues that were being negotiated with the Government. ATN's lawsuit was dismissed in March 2003, and the period for appeal of the dismissal has expired. ATN/GT&T and the Government have agreed to resume their negotiations.

Provision of cellular service is open to competition. However, operators other than GT&T are required to interconnect with GT&T with respect to international service. GT&T is the main operator in this area, with a subscriber base of over 100,000. This company operates a TDMA service in the 800 MHz range. A much smaller company, Caribbean Telecommunications Limited (CTL), is operating in Berbice, with a small subscriber base. CTL commenced operation in 1997 and offers analogue service in the 800 MHZ range. Two other cellular service licences have been issued: Caribbean Wireless Telecom received a licence in 2000 for the PCS band C, but has not yet commenced operations; Cel*Star Guyana Inc. was licensed in 2001 to provide a GSM 900 MHz service, and is expected to commence service by September or October of 2003.

The telecommunications sector could play a larger role in the country in the future. The National Development Strategy noted that through electronic commerce Guyana "could be in a position to provide or receive, for example, a range of legal, accounting, medical, educational, financial, data processing, retailing, and tourism services."[58] Achievement of that objective will depend, in part, upon the improvement of Guyana's connections to the Internet, which in parts of Georgetown is still limited to 28K bandwidth. As of early 2003, DSL service was being introduced.

2 Regulation

Many provisions in the Post and Telegraph Act (1894)(Cap. 47:01) are now superseded by the Telecommunications Act (1990), which provides for the regulation of both telecommunications and cable programmes (Cap. 47:02). The law requires persons to be licensed before providing telecommunications or cable programming services, and establishes the procedures for the granting of such licences. The law does not appear to distinguish between domestic and foreign applicants. There are provisions that allow the granting of exclusive licences. The Minister responsible for telecommunications (currently the Prime Minister) issues licences under the Act. The term of each licence is determined individually and is included in the licence. The law authorizes the promulgation of a telecommunications code, but this has not yet been issued.

The Public Utilities Commission is responsible for regulating telecommunications operators with respect to tariffs and to the quality of service offered. The 1990 Act created the post of Director of Telecommunications, with a mandate to regulate technical aspects of the operations of licensees and to develop a telecommunications code. This post was never filled due to concerns regarding the overlap of regulatory powers and the resulting uncertainties regarding the roles, functions, and procedures of the various telecommunications regulatory authorities. Numbering and spectrum management are the responsibility of the National Frequency Management Unit (NFMU).

In 2001, pursuant to the telecommunications project, the Government of Guyana issued a "consultation paper" on reform in the telecommunications sector. Although the paper does not represent government policy, it advanced an array of issues for consideration, presenting a pro-competitive vision including market-based reforms to promote the supply of sufficient telecommunications services to meet real economic demand.[59]

Like other services, telecommunications is subject to a relatively high tax rate. While the corporate income tax rate for manufactures is 35%, for telecommunications and other services the rate is 45%. The 10% consumption tax on overseas telephone bills accounts for 0.5% of government revenue (see Table 1.5). In early 2003, the Government announced that effective 1 April 2003 there will be a tax of 10% on all domestic telephone calls, regardless of whether such calls originate from a landline, cellular telephone, or fax machine.[60]

3 WTO commitments

Guyana made GATS commitments in on-line information and data base retrieval. In both market access and national treatment, Guyana made full commitments for modes 1 and 2. With respect to mode 3, Guyana specified in its market access commitments that public telecommunication transport networks and services were being provided by a monopoly supplier operating under a 20-year licence with an option to renew for a further 20-year period. Guyana made full commitments for national treatment in mode 3. As in all other sectors, Guyana made no commitments in mode 4 except as indicated in the horizontal section. Guyana has not yet adopted the WTO telecommunications reference paper.

REFERENCES

BANK OF GUYANA (2002A), "FUNCTIONS, POLICY IMPLEMENTATION AND BANK ACTIVITIES",   ANNUAL REPORT AND FINANCIAL STATEMENT OF ACCOUNTS 2001, GEORGETOWN.

Bank of Guyana (2002b), Banking System Statistical Abstract, Georgetown.

Bernard, Deryck M., (1999), A New Geography of Guyana, London.

Caribbean Community Secretariat (2000), Caribbean Trade and Investment Report 2000: Dynamic Interface of Regionalism and Globalization Kingston.

CARICOM (2003), Communiqué from the 14th Inter-Sessional Meeting of the Conference of Heads of Government of the Caribbean Community, Press Release 36/2003 [Online]. Available at: . org/expframes2.htm [16 February 2003].

Castillo, Gabriel (2001), Economic Situation and Prospects: Guyana, Washington, D.C.: Inter-American Development Bank.

Faal, Ebrima (2003), Currency Demand, the Underground Economy, and Tax Evasion: The Case of Guyana IMF Working Paper,WP/03/7, IMF, Washington, D.C.

Faria, Angelo, Robin Adair, and Dwight St. Louis (2000), Guyana: Toward a Medium-Term Strategy for Reforming Tax Policy and Administration, IMF, Washington, D.C.

Gafar, John and W. Joefield-Napier (1978), Trends and Patterns of Commonwealth Caribbean Trade: 1954-1970, University of the West Indies, Jamaica.

Gokcekus, Omer et al., (2001), Institutional Environment and Public Officials’ Performance in Guyana World Bank Technical Paper No.506, World Bank, Washington, D.C.

Government of Guyana (1996), Constitution of the Co-Operative Republic of Guyana (1980) with Amendments Incorporated, Georgetown.

Government of Guyana (2001a), Estimates of the Public Sector: Current and Capital Revenue and Expenditure for the Year 2002, Volume 1, Georgetown.

Government of Guyana (2001b), National Development Strategy, Georgetown.

Government of Guyana (2002), Poverty Reduction Strategy Paper, Georgetown.

Guyana Manufacturers Association (2001), Annual Report 2001, Georgetown.

Guyana National Bureau of Standards (2001), Annual Report 2001, Georgetown.

Guyana Forestry Commission (2001), National Forest Plan, Georgetown.

Guyana Office for Investment (2000), The Guyana Investment Guide, Georgetown.

Guyana Office for Investment, Quick Reference Guide to Investment, Georgetown.

Guyana Office for Investment, Looking Outward – Guyana is Open for Business, Georgetown.

Guyana Power and Light, Inc. (2002), Annual Report 2001, Georgetown.

Guyana Revenue Authority (2001), Annual Report and Statement of Accounts for the Year Ending 31st December 2000, Georgetown.

Guyana Rice Development Board (2001), Strategic Plan 2001-2011 for the Rice Industry of Guyana, Georgetown.

Guyana Rice Development Board (2002), Annual Report 2001, Georgetown.

GUYSUCO (1998), Strategic Plan 1999-2008, Georgetown.

Hewitt, Adrian (2001), Guyana, Sugar, and EBA: Case-Study of a Country Which is Not Quite Least-Developed, London.

InterAmerican Development Bank and Multilateral Investment Fund (2003), Sending Money Home: An International Comparison of Remittance Markets, Washington, D.C.

International Development Association and the International Monetary Fund (2002), Guyana: Poverty Reduction Strategy Paper Joint Staff Assessment, Washington, D.C.

IMF (2002), Press Release No. 02/42 [Online]. Available at: . external/np/sec/pr/2002/pr0242.htm.

Itam, Samuel, Simon Cueva, Erik Lundback, Janet Stotsky, and Stephen Tokarick (2000), Developments and Challenges in the Caribbean Region, IMF Occasional Paper 201, Washington, D.C.

Lande, Stephen (2000), Data, Information and Analytical Training Needs of the Government of Guyana in the Performance of International Trade Functions, Washington, D.C.

Lee, Barbara (2002), “Hemispheric Developments in Competition Policy: Experiences and Future Challenges”, mimeo.

Merrill, Tim, ed., (1993), Guyana and Belize: Country Studies second edition, Library of Congress, Washington, D.C.

Ministry of Finance (1993), Privatisation Policy Framework Paper, Georgetown.

Ministry of Finance (2002a), Budget Speech Eighth Parliament of Guyana, Sessional Paper No. 1 of 2002, Georgetown.

Ministry of Finance (2002b), Estimates of the Public Sector Current and Capital Revenue and Expenditure for the Year 2002, Georgetown.

Ministry of Finance (2003a), Budget Speech Eighth Parliament of Guyana, Sessional Paper No. 1 of 2003, Georgetown.

Ministry of Finance (2003b), 2003 Budget at a Glance [Online]. Available at: mininfo/gina/daily/ b030328bg.html.

Ministry of Foreign Affairs (1999), A Vibrant and Relevant Foreign Policy, Georgetown.

Ministry of Foreign Trade and International Cooperation (2001), “A Dynamic, Responsive Trade Policy to Serve All Guyanese”, Georgetown.

Ministry of Foreign Trade and International Cooperation (2002), Review of Guyana’s Foreign Trade, 2001-2002 January to June, Georgetown.

New Guyana Marketing Corporation, Fruits, Vegetables and Fish Products of Guyana, Georgetown.

Nokta, Shyam (2001), A Policy Framework for Developing Guyana’s Tourism Sector – Final Document, Georgetown.

Orozco, Manuel (2002), Remitting Back Home and Supporting the Homeland: The Guyanese Community in the U.S.

Office of the Prime Minister and Minister of Public Works and Communications (August 2001), Reform of the Telecommunications Sector in Guyana: Consultation Paper on Issues and Options for Reform of the Telecommunications Sector, Georgetown.

Ram and McRae (2001a), Chartered Accountants, GMA’s Position Paper for the Reform of the Consumption Tax, Georgetown.

Ram and McRae (2001b), Chartered Accountants, Study into the Proposed Reduction of the Rates of Consumption Tax Paid by Manufacturers in Guyana, Georgetown.

Scotland, Barton (1994), “Patents and Intellectual Property Rights in Guyana”, Georgetown.

Singh, Ranjit et al., (2001), The Caribbean Poultry Industry: Competitiveness Trade Policy and Development Strategies, Kingston, Jamaica.

U.S. Department of State (2001), FY2001 Country Commercial Guide: Guyana, Washington.

U.S. Department of State (2002), FY2002 Country Commercial Guide: Guyana, Washington.

Williamson, Irving (2000), WTO Strategic and Action Plan Interim Report, Georgetown.

World Bank (2001), Country Brief: Guyana [Online]. Available at: External/lac/lac.nsf/Countries/Guyana/113D6E9973AEDB62852569040050F087?OpenDocument.

WTO (2002), Trade Policy Review – Venezuela, Geneva.

-----------------------

[1] These items are classified in national accounts as manufactures, but fall under the WTO definition of agriculture.

[2] Government of Guyana (2001b), Chapter 11, "Agricultural Institutions".

[3] MOA and MFCL online information. Available at: mfcl/index.htm.

[4] WTO documents G/AG/N/GUY/2, 28 September 1998; G/AG/N/GUY/6, 2 August 2001; G/AG/N/GUY/7, 2 August 2001; and G/AG/N/GUY/8, 2 August 2001.

[5] WTO document G/AG/N/GUY/1, 28 September 1998.

[6] Ministry of Finance (2003a), p. 24.

[7] Ministry of Finance (2003a), pp. 7 and 9.

[8] Government of Guyana (2001b).

[9] Under the Sugar Protocol, guaranteed prices for the ACP white or raw sugar apply to bulk sugar cost, insurance and freight paid (c.i.f.) to European ports.

[10] GUYSUCO (1998).

[11] Ministry of Finance (2003a), pp. 7 and 9.

[12] Government of Guyana (2001b).

[13] Calculated using raw data supplied by the Guyana Rice Development Board.

[14] Ministry of Agriculture online information. Available at: mfcl/index.htm

[15] Ministry of Finance (2003a), p. 24.

[16] Guyana Rice Development Board (2001), p. 6.

[17] Guyana Review "Agreement between the Government of Guyana and the Guyana Association of Bankers on Rice Sector Relief Package, 31 January 2002" Volume 10, No 111, March 2002, p. 23.

[18] Starbroek News (18 June 2003), p. 10.

[19] Ministry of Fisheries, Crops and Livestock with Responsibilities for Forestry online information. Available at: .

[20] Singh et al. (2001), p. xi.

[21] Ministry of Finance (2002a), p. 27.

[22] Guyana Review "Fishing in Troubled Waters," Volume 10, No. 116, August  2002.

[23] Bernard (1999).

[24] Ministry of Finance (2003a), p. 9.

[25] Guyana Forestry Commission (2001), p. 1.

[26] U.S. Department of State (2001), pp. 29-30.

[27] Guyana Review, "CI Concession", in Volume 10, No. 116, August 2002, p. 32.

[28] Ministry of Finance (2003a), p. 9.

[29] Government of Guyana (2001b), Chapter 16.

[30] Note, however, that for minerals other than gold and silver, private rights are grandfathered for land grants made prior to the Mining Ordinance of 1903.

[31] U.S. Department of State (2001), p. 29.

[32] Ministry of Finance (2003a), p. 8.

[33] Bernard (1999), pp. 38-41.

[34] Production data for 2002 are from Ministry of Finance (2003a), p. 7. Prospects for 2003 are from Guyana Review, "Gold Production", Volume 11, Nos. 121 and 122, January and February 2003. Export data are from Guyana Review (various issues), "Selected Financial Indicators".

[35] Guyana Review, (various issues) "Selected Financial Indicators".

[36] Guyana Review, Volume 11, No. 123, March 2003, p. 24.

[37] U.S. Department of State (2001), p. 5.

[38] Bank of Guyana (2002a).

[39] Calculated from data on the U.S. International Trade Commission DataWeb. Available at: .

[40] While rum is counted as a manufactured product by Guyana, it falls under the WTO definition of agriculture, together with other beverages and other processed food products.

[41] Guyana Review, "The Furniture Business," Volume 10, No. 116, August 2002, p. 23.

[42] Guyana Review, "The Chinese Connection," Volume 10, No. 18, October 2002, pp. 16-18.

[43] Guyana Manufacturers Association (2001), p. 5.

[44] Guyana Power and Light, Inc., (2002), p. 4.

[45] Ministry of Finance (2003a), p. 31.

[46] Government of Guyana (2001b), Chapter 7.

[47] Tiboku (Mazaruni Potaro River Basin); Amaila and Tumatumari (Potaro River Basin); Kamaria (Cuyuni River Basin); Tiger Hill (Demerara River); and Arisaru (Essequibo River Basin).

[48] Guyana Office for Investment (2000), p. 67.

[49] Bank of Guyana (2002b).

[50] Bank of Guyana (2002b), p. 18.

[51] Nokta (2001), p. 4.

[52] Ministry of Finance (2002a), p. 50.

[53] IMO online information. Available at:

[54] Bernard (1999), p. 44

[55] Calculated from 2001 data on the DataWeb of the U.S. International Trade Commission.

[56] Guyana Review, "Trying Times for Flying," Volume 10, Nos. 109 and 110, January and February 2002.

[57] Guyana Office for Investment (2000), p. 13.

[58] Government of Guyana (2001b) p. 65.

[59] Office of the Prime Minister and Minister of Public Works and Communications (2001) p. 2.

[60] Ministry of Finance (2003a), p. 34.

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